Cisco kills the Flip
Posted by Bradley Wint on 16/04/2011
Cisco has pulled the plug on their Flip camera line, leaving 550 employees on the breadline. The company’s execs felt that they were going off course and had to refocus on their core business.
Cisco 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. They also plan to 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.
They will 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. Finally they will 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. “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.”
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.
Current FlipShare owners may eventually be thrown into the dark hole of no-support and it still makes us wonder why Cisco did not sell the Flip arm to another company focused on mini video cam production. Owners such as myself can vouch for FlipShare products as being top of line, by producing high quality video for such small devices.