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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 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.

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