Don't look now, but the Flip camera is officially dead. Cisco announced Tuesday morning that it is killing off the line of pocketable video cameras in order to refocus the company around home networking and video. The news was a surprise to even Flip critics, leaving everyone wondering why Cisco bothered to buy Pure Digital (the Flip's former parent company) for $590 million just two years ago.
When Cisco purchased Pure Digital and its Flip line in 2009, many observers were left scratching their heads. Cisco, known for its enterprise and networking prowess, wanted to dive deeper into consumer electronics? The marriage never fully made sense, but we accepted it—most assumed that Cisco was making its own attempt to compete in the handheld market by simply gobbling up one of the hottest little gadget startups at the time. Pure Digital was placed alongside Linksys in Cisco's Consumer Business Group.
Two years later, Cisco's feelings about the acquisition have changed. Cisco announced that it's expanding the Consumer Business Group, but that the Flip business will no longer be part of it. There was no formal explanation given as to why Cisco chose to shut the group down instead of selling it, but Cisco's Global head of PR told Pocket-lint that "Stopping the business rather than selling it was the best course of action for the business."
Indeed, the Flip can't be faring well against the growing number of smartphones with built-in HD cameras. The quality of your typical smartphone video camera is comparable to the Flip, and people have their phones on them all the time. (What's that saying about the best camera being the one you have?) There's no doubt that the line was probably not growing at the rate Cisco would have liked, but the Flip was still holding its ground against competition like Kodak with its own line of small, pocketable video cameras. Pure Digital offered one of the cleanest and easiest to use non-phone video solutions.
As for what Cisco will be doing with the rest of the Consumer Business Group, the company says it will concentrate on home networking and expanding into a video platform for the home. Cisco CEO John Chambers added that the company's consumer efforts would "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."
Networking is definitely the theme of Cisco's announcement—not gadgety things like the Flip. The company said it would continue supporting customers of its FlipShare photo sharing service through a "transition plan," but otherwise, about 550 people from Pure Digital's part of the company are now out of a job.
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