Not a Flip question, Cisco
Decision to close down camcorder unit in lieu of selling it makes little sense
To absolutely no one's surprise, Cisco Systems on Tuesday announced it would cease making the popular Flip camcorder, a consumer product no longer seen by CEO John Chambers as fitting into the networking equipment giant's core mission.
Too true. In fact, the Flip, which came to Cisco when it acquired Pure Digital Technologies for $590 million two years ago last month, never made a whole lot of sense for Chambers' enterprise-focused company.
Nor have any of Cisco's consumer products, which generate only 10 percent of the company's revenue.
No argument here. But Network World's Julie Bort asks a good question: Why didn't Cisco attempt to sell the Flip unit?
Granted, the consumer market's not working out for Cisco, but there are 550 Flip employees who would have liked an opportunity to make it work out for another corporation. For some reason, however, Cisco has opted to fold the unit instead of finding a buyer.
One big reason is a $300 million write-down. But did Cisco even try to find out what the market would bear for what research firm NPD calls "far and away the leading consumer video camera company," as Bort writes?
Camcorders no doubt are a niche market, but Flip was well-positioned in that market. Millions of people own Flips and would buy another if they could. There's a tangible value to that. Why not let another company try to capitalize on it, plus get back some of Cisco's investment, instead of resorting to a write-down?
Oh, maybe save a few hundred jobs. Is that so crazy?