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The Rise and Fall of Flip: What Went Wrong

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Just two years after its acquisition of Pure Digital, Cisco (s CSCO) has officially given up on its Flip line of video cameras. But with the shutdown of its consumer video camera business, Cisco is also closing the book on a pretty extraordinary change in personal video creation.

More than maybe any other product of its time, the Flip video camera helped to democratize the creation and distribution of personal videos. The product had a very simple value proposition: Not only was shooting video drop-dead easy, but it was also incredibly inexpensive. At less than $200, Flip cams became sought-after Christmas and birthday presents.

Those gifts sparked a new phenomenon of sharing personal videos online. Consider, for instance, what YouTube (s GOOG) would have been without the ease with which Flip users could shoot, import and upload their videos to the site. Facebook, too, has benefited from the growth of video viewing that happens on its social network, and Flip videos were no doubt a large part of that.

But Pure Digital was unable to build on its early success in the personal video camera segment. One could argue that the death of the Flip cam was an inevitability, that even if the product hadn’t languished under Cisco’s direction that eventually the concept of a standalone video camera would lose out to video capabilities added to new smartphones and to more powerful video functionality sneaking into digital still cameras.

The real problem, though, is that as the market matured, the Flip cam didn’t. It added a new HD line, but other than an improvement in video quality, Pure Digital and Cisco did little to improve the product line over the years. For all its networking prowess, Cisco never made the leap to add any sort of wireless chip into the camera products, a move that most saw as a no-brainer. Unlike smartphones, there was no way to easily share Flip videos directly to the web.

Furthermore, Flip wasn’t able to capitalize on its user base and build useful services to coincide with the hardware. Clearly, Flip users wanted to share their videos with friends, but its video platform and destination site were a failure. Despite the fact that Flip’s video editing software and FlipShare sharing site were included with the camera by default, many users preferred to use third-party software for importing and editing their videos. And YouTube and Facebook were the go-to places to upload videos once they made their way onto the PC. In other words, its software and web presence never lived up to its hardware design.

All that said, it’s difficult to believe that Cisco is just cutting its losses and shutting Flip down. One would think that even if Cisco no longer found Flip valuable as part of its narrowing consumer strategy, it would be able to find a buyer interested in the Flip assets and Pure Digital personnel. With today’s announcement, Cisco has marked not just the end of a once-popular consumer product, but the end of an era.

4 Responses to “The Rise and Fall of Flip: What Went Wrong”

  1. You’re not asking the right questions.

    Is Kaplan sad? No, no he’s not. He made off with tons of money. Look at the smile on his face in Kara’s video.

    Is Chambers contrite? For wasting tons of his shareholders money and laying off hundreds of people (after outsourcing support jobs earlier)? No, not really. Read what he said:

    “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.”

    Can you parse that sentence? Does it make any sense at all?

    If Cisco is so focused now, why didn’t they kill the pointless Cius tablet they’re still working on for no good reason. Why didn’t they either fold or declare the Umi as a strictly business video conferencing solution given that its pricing makes it dead on arrival as a consumer product.

    Ask those questions. Ask who at Cisco helmed this thing into the ground. Ask if any of those executives got the axe yesterday, for backing this stupid purchase.

  2. I think you buried the most important question in the 2nd to last sentence.

    Why didn’t they sell the product line/technology to a consumer electronics or camera company? Or a consumer products-oriented PE firm? Not only would it be a better financial outcome, but it would allow them to save some face.