backtop


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.



Comments     Threshold


This article is over a month old, voting and posting comments is disabled

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.


"This week I got an iPhone. This weekend I got four chargers so I can keep it charged everywhere I go and a land line so I can actually make phone calls." -- Facebook CEO Mark Zuckerberg

Related Articles













botimage
Copyright 2014 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki