Cisco axes Flip video camera business and 550 jobs

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 spent blew $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.

30 Comments

    1. They spent all that money so people like you would come to believe that the Flip video camera was a “big seller” and start talking it up. You believed it.

      Now think about all the BS hype about the NEXT iPad Killers. Ever seen one on the street? Anyone you know standing on any line to get one? Anyone hoping to ever get one? Never going to happen in any great volume for many years.

    2. Was, the import part. When Flip came out it made video very simple; one button, and USB connector built in. At that time video was a pain in the ass on phones and point and shoot cameras. Apple and Android (so they copied, still bad for Flip) made video easy on their phones, no need for a extra device to carry. Flip did show that there was a market for simple video cameras, now there is an app for that.

  1. So Cisco flipped Flip. That’s nice. Next Cisco will flip the finger at HP for cutting into its networking business.

    I wonder how many burritos John Chambers had to forgo for flipping out on $600 million.

    1. My Buzzword Bingo machine popped a circuit breaker on that one…

      …maybe Cisco should have leveraged some synergies, or maybe reached a point of six-sigma equilibrium…

      1. I read that a dozen times attempting to find something resembling the English language, and all I got was an aneurysm.

        “As we move forward,”………….NO SHIT ELMER.

        NOW, Balmer has some competition.

      2. Cisco should integrate its sales-oriented, customer-facing, revenue-generating key offerings to optimize shareholder value even as it regains laser-focus on competitive market opportunities and lower Total Cost of Ownership via XML-based SaaS employee engagement strategies.

      1. OK, so I finally get it. Now, hear me out. Which one is dumber? Chambers or Ballmer? And take the answer to that question and compare him to Jobs. Now, rank them according to annual salary.

    1. Cisco didn’t kill them anymore than Palm killed the PDA, H-P killed the netbook, Amazon killed the Kindle or Nokia killed Symbian.

      Reality will kill them all….

  2. I, perhaps alone, am a bit sad to see this news. Flip was a Mac-friendly product from the first, and its clean design and simple functionality was very Apple-like. Sure, its purpose was superseded by smartphone cameras, but it was never a hostile competitor to the iPhone.

  3. I have a Flip and iPhone 4. The video quality is roughly equal but the sound captured by the Flip is way better than the built in microphone of the phone. So it’s a shame that this competition will be gone – one less incentive for Apple to improve their video camera function on the iPhone.

    1. I actually bought a 1080i mini camera (uses SD flash) instead of a Flip. But I find that I shoot more often in 720p x 60 fps. The quality and sound are still way better than iPhone 4, and far superior to Flip (and thinner and lighter than Flip). Maybe it was Flip spec that couldn’t cut it. My cam is not that much bigger than an iPhone.

  4. I too liked the flip. Worked great with Imovie, although a weird import process and it was easy to pass around the office for use. Not doing that with my iphone, or ipod!

    Overall, I thought flips were great and said to see them disappear.

  5. I agree that Flip was a ground-breaking device, as it allowed Apple-type simplicity (and compatibility) while creating superior video at an amazingly low cost. . . . The cost was so low that I purchased a second unit so that I might be able to shoot for six hours without downloading. That’s a major advantage in the field.
    But the advent of iPhone4 video really sounded an early death-knell for the Flip. . . . I understand that iPhone video doesn’t quite match the Flip’s qualities in picture or sound, but as an added feature to the already superior device, it is an amazing value, as well. The iPad2’s camera is supposed to be better for video than stills. I hope it’s at least as good as the Flip.

    Interestingly, after my last OS upgrade on my iPad Classic, I no longer needed to convert the video format from the native Flip, to load it on my iPad. That saves time, effort and cycles. My Flip is so convenient, that I carry it in a pocket on my iPad case.

    I’ll be getting an iPhone sometime in the near future.

  6. I think MDN is being a little too harsh and less than magnanimous here. Flip proved the market for solid state video recorders and did great business as a startup that came from nowhere to scare the big camcorder makers. Don’t forget just a few years ago, Canon and Sony wanted you to buy tons of digital video tapes to shoot your video. Flip – not iPhone – single-handedly changed all that.

    Just like Steve Jobs gave credit to Amazon foe paving the way with the Kindle when introducing he iBookstore (he said Apple was standing on the shoulder of giants), MDN needs to learn to be more generous in victory. Otherwise, MDN, you just turn into the same snide arrogant person who deserves ridicule.

    Sad to see how a big giant messed up a small successful company that was producing real jobs with real wages for hundreds of families.

    1. NewType, you make many good points, but none more than the last: if Flip were still an independent company, both the product and the jobs would still be around.

  7. I’ll probably go get another Flip before they disappear altogether. The old one I’ve got is great and, although it doesn’t get as much usage since the iPhone, I’m willing to put it in situations that I wouldn’t let my iPhone get anywhere near.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.