Cisco Systems Inc., the company behind the Flip camcorder, stepped away from that once-profitable sector of consumer electronics this month resulting in over 500 axed jobs and a $300 million loss. Common sense points to a decline in necessity for generally singular recording devices; most smartphones now do the same and more.
However, a new report believes Cisco’s exit wasn’t the best option despite the division’s admittedly lackluster financial performance.
“Was Cisco’s assessment of consumer attitudes regarding high-definition video recording wrong,” asked analyst IHS iSuppli. “The answer is yes and no.”
In a recent study of the networking powerhouse’s decision to shutter its Flip camcorder division — a business the company had only just acquired in 2009 for $590 million — IHS analyst Jordan Selburn said closing Flip made sense as it wasn’t a good match to Cisco’s bread-and-butter: networking devices and set-top boxes.
Lamenting the twilight of the “single-task device” in a marketplace where more and more gadgets are doing, well, more and more, Selburn counted Flip as “an early casualty,” noting that e-readers could see a similar downturn as media tablets continue to evolve.
Selburn was reticent to label the move an all-around success, however.
“The most surprising aspect of Cisco’s decision was the move to simply close Flip, rather than sell it or spin it off as an independent company to get at least some return from their investment,” he said. If consumers continue pining for well-made products (as they are wont to do), Selburn feels the Flip could still mount a comeback — albeit refashioned, less expensive and possibly under a new company’s banner.
Do you own a Flip and still actively use it to record video? Or do you employ a more diverse product? Let us know in the comment section.