arris says its new structure should eliminate interoperability issues, simplify life for stations and networks, and streamline marketing under one brand. The company is still working to integrate the products it gained through a string of acquisitions since 2000: automation vendor Louth, traffic supplier Encoda, infrastructure vendor Leitch, encoding manufacturer Aastra and traffic vendor OSi.
“It is not our plan to run it as a portfolio of independent businesses but as an integrated-workflow model,” said Tim Thorsteinson, president of Harris’ broadcast communications division.
He said the broadcast division, which has more than $600 million in annual revenue and spends some $100 million on R&D annually (all figures US$), is open to further acquisition if it “allows us to bring more products to market or broaden our customer base.” He added that Harris has changed its sales approach to an account-management structure, under which one salesperson sells “a whole solution” as opposed to individual sales people handling different product categories.
One of Harris Broadcast’s strengths, of course, is that it itself is part of communications conglomerate Harris Corp., which serves a variety of government and commercial markets and has more than 13,000 employees worldwide. Harris Corp. has “had a great five-year run,” noted Thorsteinson, growing annual revenues from $1.8 billion in 2002 to $3.47 billion in 2006 and posting $237.9 million in net income, versus $82.6 million in 2002. In that same period, its stock has climbed from around $16 to more than $50.
Thorsteinson says the broadcast-technology business in general is the best it has been in his 13-year tenure in the industry, with the Leitch infrastructure line of routers, converters and servers providing double-digit sales growth attributed to stations’ and networks’ upgrade to high-definition.
The one soft spot for Harris has been transmitter sales, because most broadcasters have already made their digital-TV investments and the 500 or so stations that need gear for their final digital-channel assignments have been slow to make a move. As a result, Harris is actually cutting about 150 of 700 jobs at its transmitter-manufacturing plants in Illinois and Ohio.
“[The division’s] soon to be called something else, as 'broadcast’ ties us back to our transmission roots,” said Thorsteinson. “While we are glad those roots are there, the business has moved significantly beyond transmitters, and we will be positioning the business a little beyond the traditional broadcast name.”
Nonetheless, Harris isn’t giving up on over-the-air–broadcast technology. Harris VP Jay Adrick announced that the company is developing a mobile-television system designed to work within the ATSC digital-TV standard. The technology, which Harris is calling “Project Eagle” for now, would compete with the A-VSB technology developed by Samsung and Rohde & Schwarz and demonstrated at CES in January.
