As part of the company’s comprehensive plan to align its operations, Cisco today announced that it will exit aspects of its consumer businesses and realign the remaining consumer business to support four of its five key company priorities — core routing, switching and services; collaboration; architectures; and video. As part of its plan, Cisco will:
• Close down its Flip business and support current FlipShare customers and partners with a transition plan.
MacDailyNews Take: Just over 2 years ago, Cisco
spentblew $590 million acquiring Flip-maker Pure Digital.
• Refocus Cisco’s Home Networking business for greater profitability and connection to the company’s core networking infrastructure as the network expands into a video platform in the home. These industry-leading products will continue to be available through retail channels.
• Integrate Cisco umi into the company’s Business TelePresence product line and operate through an enterprise and service provider go-to-market model, consistent with existing business TelePresence efforts.
• Assess core video technology integration of Cisco’s Eos media solutions business or other market opportunities for this business.
“We are making key, targeted moves as we align operations in support of our network-centric platform strategy,” said John Chambers, Cisco chairman and CEO, in the press release. “As we move forward, our consumer efforts will focus on how we help our enterprise and service provider customers optimize and expand their offerings for consumers, and help ensure the network’s ability to deliver on those offerings.”
MacDailyNews Take: When you blow $590 million, you start puking corporate jibberish.
In connection with the changes to the consumer business, it is anticipated that Cisco will recognize restructuring charges to its GAAP financial results, with an aggregate pre-tax impact not expected to exceed $300 million during the third and fourth quarters of fiscal 2011. The charges will be disclosed in upcoming earnings conference calls and quarterly Form 10-Q filings. Additionally, the company expects this will result in a reduction of approximately 550 employees in the fourth quarter of fiscal 2011.
Source: Cisco Systems
MacDailyNews Take: “The Flip will find its way into some very obvious places and maybe some not-so-obvious ones.” – Pure Digital CEO Jonathan Kaplan, upon Cisco’s $590 million acquisition.
To anyone who’s ever used an Apple iPhone or iPod touch to shoot and share video with just a couple of taps, the grave was a very obvious place for the Flip, no maybes about it.