Posted: April 2011
When the Flip video camera debuted in 2007, it quickly dominated the camcorder market with its low price and ease of use. From 2007 to 2009, over two million units were sold. In 2009, Cisco purchased the Flip video camera as part of its strategy to expand their reach beyond the enterprise market and sell directly to consumers.
Fast forward, to this month. Cisco Press Release:
- 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.
So, why the sudden demise of Flip? Some say, and many stated at the time of the acquisition, Cisco’s business structure could not effectively adapt to the consumer market. That probably was and is true, but I believe the more interesting factor is the explosion of the smartphone.
When Cisco purchased Flip in 2009, smartphones were limited in functionality and focused primarily on email. In the past two years, the features and functionality on smartphones have exploded including higher quality cameras and video recording capabilities. Although slow to build, there has been a shift with consumer purchasing habits and their willingness to invest more in a phone if it takes the place of other devices. Cisco saw the writing on the wall.
I would suggest that the same transformation is occurring with tablets and laptops to some degree. The consumer will look to consolidate their activity to a single device and as the design, features and functionality expand with tablets the laptop of today may be caught in the middle. Unlike The Flip, I do not think they will disappear, but it would be wise for the laptop manufacturer’s to learn a lesson from Cisco and The Flip.
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