When it comes to cable modems and set-tops, the Motorola brand will endure, at least for a few more years.
Zoom Telephonics announced Monday that it had struck an exclusive five-year license agreement with Motorola Mobility to use the Motorola brand in connection with Zoom’s consumer cable modem products, including cable modem bridges, cable modem/routers and cable set-tops that are manufactured, marketed and sold in the U.S. and Canada.
Zoom said the agreement begins on Jan. 1, 2016, and runs through the end of 2020. Financial terms were not disclosed, but Zoom has agreed to pay Motorola Mobility a one-time set-up fee and a royalty based on net sales during the term of the license deal, according to an 8-K filing.
Arris has been using the Motorola brand as part of an agreement negotiated with Google, which sold the Motorola Home division to Arris in April 2013 for $2.35 billion. Following the closing of that deal, Arris had one year to phase out use of the Motorola brand, but ended up signing a two-year extension. Arris has stressed that it intends to continue selling cable products through retail channels.
Zoom will be taking that brand forward with respect to cable modems and set-tops starting next year, and has plans to develop an “extensive line” of Moto-branded cable modems, Frank Manning, Zoom’s president and CEO, said in a statement.
"Motorola is a leading brand of cable modems at retail, and we're honored and thrilled to be licensing this powerful brand," Manning added. "This license has the potential to grow Zoom's sales dramatically. We are committed to the hard work necessary to take advantage of this significant opportunity to grow Zoom's business, and we are looking forward to working with Motorola Mobility and Motorola cable modem retailers, distributors, and service providers to make this transition smooth and successful for them.”
Zoom has set a conference call for Tuesday at 10 a.m. ET to discuss the agreement in more detail.
Zoom, which already sells a variety of cable modems at retail under its own brand (this DOCSIS 3.0 modem, for example, sells for $69.99 via BestBuy.com), has had some run-ins with cable operators over their respective policies for cable modems sold at retail.
Of recent note, the FCC, at the request of Zoom, had been vetting Charter Communications’ third-party cable modem certification practices (subscription required). Zoom had filed a petition to deny the now-defunct Comcast-Time Warner Cable merger, but had also asked the FCC to apply a condition that Charter state unsubsidizied pricing for leasing cable modems and not “unreasonably” refuse to allow “nonharmful” modems to attach to its network.
In 2011, Comcast and Zoom jointly filed a request the FCC to dismiss Zoom's complaint about Comcast’s certification testing requirements for modems sold at retail, after the two companies reached a settlement on the issue. Terms of the settlement were not disclosed.
