Cisco flicks off Flip

photo courtesy of Cisco

With the push of a big red, Flip Video‘s brief life ended.

Cisco Systems Inc. axed the product line on Tuesday just two years after purchasing Flip’s creator Pure Digital Technologies Inc. Flip, the former darling of the pocket camcorder market, was supposed to help Cisco capture more consumer business. Now the candybar-shaped cameras eerily resemble little tombstones marking the demise of that dream.

Flip cameras, with their frills-free features, let users quickly record and then share video. The red button on the back practically screams “push me” in a novice-friendly way. Cisco cited Flip’s mass market appeal in 2009 when it acquired Pure Digital for $590 million.

Jonathan Kaplan, then-CEO of Pure Digital, became general manager of Cisco’s consumer business group until his abrupt departure in February. Kaplan left after Cisco reported a 15 percent drop in its consumer product sales for its fiscal second quarter ended January 29. Cisco said its consumer business was affected by customers gravitating to lower cost alternatives to its products. The company also said it expected more challenges in the consumer market in the second half of fiscal 2011.

Stephen Baker, vice president of industry analysis with The NPD Group, did not take Flip’s demise as an omen for the pocket camcorder market. “Both Sony and Kodak had very strong sales during the past holiday season while Flip did not,” Baker said. He pointed to Flip’s pricing as one factor in its troubles. Competition is growing as other small, portable devices such as smartphones are built to shoot video, but Baker does not see them as immediate challengers to pocket camcorders. “While clearly the smartphone market will impact the pocket camcorder space it is not happening right now,” he said. “Sales during the past holiday season were slightly up over 2009.”

Cisco said it will focus its remaining consumer operations to support its business market.

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About Joao-Pierre S. Ruth
New York tech correspondent for Xconomy, tech writer for Investor Uprising, and aspiring urban fantasy writer. I also make brownies and crème brulee.

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