Print 20 comment(s) - last by Pessimism.. on Apr 13 at 2:25 PM

Cisco crashes and burns with Flip purchase

What once seemed like a promising segment of the consumer electronics market is now being brushed aside -- at least in the Cisco camp. Just two years ago, coughed up nearly $600M to acquire Pure Digital, the maker of the popular Flip video cameras

While many questioned the need for Cisco, a networks-oriented company, to invest in this hot consumer category (over two million units were sold within the first two years), the company moved forward and carried the Flip torch. Now, Cisco's spending spree is coming back to bite it in the butt. 

Cisco is closing down its Flip division, and will restructure its other business operations. As a result, the company will take a $300M charge and will fire 550 employees by the end of this year according to the New York Times.

"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. "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."

So why is Cisco dumping its investment so soon? It all comes down to convergence. You can't shake a stick without knocking a camera-equipped phone out of someone's hand. On top of that, many of today's high-end smartphones come with high quality image sensors that can capture 720p video footage

With most tech-savvy individuals already carrying around a small, powerful "video recorder" in their pockets 24-7, why would they need to purchase a separate, larger dedicated device with similar capabilities? 

Similar digital convergence has happened on a lesser scale with MP3 players, but one has to wonder while all of the smart folks over at Cisco didn't see this one coming.

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RE: About time!!!!
By FITCamaro on 4/12/2011 5:18:26 PM , Rating: 1
Yeah I have no idea who would buy one of those things. I don't know anyone who owns one.

Even my 18 month old Droid takes pretty decent video.

RE: About time!!!!
By Zstream on 4/12/2011 5:26:48 PM , Rating: 1

My flip mino HD records much higher resolution than your droid. The flip mino hd can take an hour of recording and beat most camera's and phones. It's about the same size as an ordinary phone.

Sorry mate, but if you like charging your junk phone every 30 minutes.. by all means do so.

RE: About time!!!!
By kraeper on 4/12/2011 7:41:53 PM , Rating: 1
OK, but there are cellphones that take 1080p video, which is far higher resolution than your 720p dedicated video device that you can't even play AngryBirds on. Not that I'd want to on your 2-inch screen.

Point is, people make different choices. Most people choose to carry one device instead of two that have identical functions. I think you're just weird.

RE: About time!!!!
By michael2k on 4/12/2011 7:48:14 PM , Rating: 2
Uh, my phone (iPhone) records 720p just fine.

Likewise, it can record for up to 4gb of file size, just like your minoHD, but can actually last for 10 hours of playback (unknown what the mix of recording+playback is), but it can at least last long enough to record an hour.

So really, the question is, if I can do HDR pictures, tap to focus, tap to white balance, record multiple 1hr videos, and play back multiple 1 hr videos, for a subsidized price of $199, why bother carrying another device for another $180?

I imagine the image stabilization and autostitching of 4gb files is nice, but at the same time those things can also be done in software, which I expect a future iOS release will get me.

RE: About time!!!!
By Solandri on 4/13/2011 8:08:53 AM , Rating: 2
The iPhone's camera is actually not very good. Under less-than-sunny conditions, the rolling shutter creates severe artifacts. You know those home videos of the earthquake which look like they were shot by pointing the camera at a mirrored surface that's bending and flexing? Most of those are iPhone videos exhibiting the following distortion:

That said, the Flip suffers from the same problem, as does most any camera using a low-cost CMOS sensor (yes, the camera on the iPhone is cheap). So there is still a place for a dedicated camcorder or camera (they take much better still photos too). With a dedicated camera, because the primary function is to take good pictures, flaws like this are unacceptable. With a phone camera, because the camera is a secondary function, manufacturers just look for the cheapest way they can check off a box in the phone's feature set, and figure (correctly) that most people won't really care that the feature is sub-optimal.

A more detailed description of the phenomenon if you're interested.

RE: About time!!!!
By invidious on 4/13/2011 12:24:29 PM , Rating: 2
Good points, but I dont think anyone is trying to say that a smartphone camera is the end all of cameras. A good camera costs hundreds of dollars and all of the hardwre cost is decidaced the sole purpose of being the best camera possible. No one expects a smartphone to compete in that market or have comparable results, smartphones costs less and the lens is only a fraction of its hardware costs.

But the Flip is meant to compete with smartphones. Given the comparable price and and comparable camera performance it leaves anyone with a smartphone already in their pocket wondering wtf is the point.

If you can't make a pocket camera that performs significantly better than a smart phone then don't make a pocket camera.

RE: About time!!!!
By Souka on 4/12/11, Rating: 0
RE: About time!!!!
By Souka on 4/13/2011 1:36:00 PM , Rating: 2
Wow... I got downrated? Jerk(s)

RE: About time!!!!
By Lord 666 on 4/12/2011 8:53:57 PM , Rating: 2
There is nothing stopping Cisco or some other company from just buying a cell phone company (Palm or maybe now RIM) and combine both the Flip technology and a smartphone.

That was my point with Warrior that since all cellphones have video cameras (even in the dark ages of 2009) then it would be logical to just combine the two instead of a dedicated device.

The VZW Thunderbolt comes with 32gb built-in. Can't tell me the technology of the Flip (other than the lens) is vastly different than a smartphone.

Come to think of it, I find it oddly curious why Cisco licenses both the trademark of iOS and iPhone to Apple. Sure, they are not patent trolls, but for Cisco not to enter the smartphone segment is missing the boat. Look at what they did with cable boxes and home routers...

RE: About time!!!!
By fic2 on 4/12/2011 10:13:05 PM , Rating: 3
Look at what they did with cable boxes and home routers...

Buy existing companies (Scientific Atlanta and Linksys) and relabel the products?

RE: About time!!!!
By Lord 666 on 4/12/2011 10:56:42 PM , Rating: 2
Correct - read my first sentence. Isn't that what they did with every other acquisition? Protego Networks is an excellent example, can list many others.

I even asked/suggested to John Morgridge in 2005 about acquiring Palm. He simply, "Hmm, that would be interesting" and we went back to discussing something else. It is illogical for Cisco not to purchase a handset company and in 2011 - 2012, it would be very plausible for them to purchase RIM. Think about the instant business customer base along with complimentary product lines plus a new tablet that can run Android.

There is nothing stopping Cisco or some other company from just buying a cell phone company (Palm or maybe now RIM) and combine both the Flip technology and a smartphone.

RE: About time!!!!
By fic2 on 4/12/2011 10:11:32 PM , Rating: 2
I bought two to give to my 10 year old niece and nephew. I would much rather give them a Flip than a cell phone.

RE: About time!!!!
By abhaxus on 4/13/2011 1:33:16 PM , Rating: 2
They are different devices for different uses. I personally don't really have a need for a compact point and shoot or 'flip' style camera, but I do see the need for one. This christmas my family got one for my dad for backpacking, and for this I definitely see the use. Either you carry a camera that has great battery life and an ultrafast startup time, or you carry a phone that might last 24 hours if you underclock it, and maybe an extra battery (or one of the portable juice boxes) that adds weight. Plus I think the temptation of angry birds while on the trail would defeat the purpose of being on the trail.

I don't really understand why cisco bought them, but their sales have been completely dominated by the Sony Bloggie line anyway. Once Sony put the usb port on the camera, the superior interface and build quality made it a no brainer.

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