The Cisco Flip Flop

An article in the New York Times reported that Cisco is planning to close down Flip, the digital camera company it purchased for $590 million a mere two years ago.  The Flip, a range of video cameras whose compact size and user friendly operation made them wildly popular with consumers since their release in 2007, remains the top-selling camcorder on Amazon to this day. 

So why is Cisco discontinuing this popular product?  In a word: smartphones.

While the iPhone also debuted in 2007, its initial iteration did not have video capability. As the iPhone’s technology improved and a wave of Android competitors hit the market, Cisco no doubt saw the writing on the wall that Flip’s video stand-alone functionality wouldn’t withstand the marketing allure of multipurpose devices.

The most basic Flip video camera, the Ultra HD, records in high definition at either 30 or 60 frames per second with a resolution of 720 pixels and offers 4 or 8 GB of memory.  In comparison, the iPhone 4 can shoot video at 30 frames per second with a 720 pixel resolution AND allow you to take and make phone calls, send and receive text messages, browse the internet, take still photos and more.  A comparison of four popular Android phones at PhoneDog showcases similar functionality.

Cisco and the Flip can take heart that they are not alone in erosion of market share by smartphones, as GPS devices are taking a hit as well.  Although Danny Minick of Garmin recently argued that stand-alone GPS devices are still important, no doubt Garmin, TomTom and Magellan are feeling the effects of the burgeoning smartphone market.  One wonders how long mp3 players, and even the venerable iPod, will last as consumers make the switch to smartphones in even greater numbers.

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