Cisco

Cisco To Shut Down Flip Video Camera Business; Will Give Pink Slips To 550 Employees

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Wow. Cisco has just issued a release stating that in a strategic plan to “align its operations,” the company will exit parts of its consumer businesses and realign the remaining consumer business to support four of its five key company priorities: core routing, switching and services; collaboration; architectures; and video. One of the casualties of this realignment: Cisco’s video camera Flip business, which was part of its $590 million acquisition of Pure Digital.

As part of the plan, Cisco will close down its Flip business and “support current FlipShare customers and partners with a transition plan.” Cisco will also refocus its Home Networking business and will integrate Cisco umi into the company’s Business TelePresence product line. As part of the transition, Cisco plans to eliminate 550 jobs.

Cisco CEO John Chambers issued this statement: “We are making key, targeted moves as we align operations in support of our network-centric platform strategy…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.”

So Cisco is focusing on its enterprise customers, and is basically shutting down its consumer facing products. The writing was on the wall for the Flip video business. In a world where consumers can now record and stream video directly from their iPhone, Android or BlackBerry phone, Flip’s video camera business is no longer novel or useful.

Cisco also pulled the plug on its web email product earlier this year. Chambers recently wrote a regretful, ‘mea culpa’ note highlighting that the company had disappointed investors and lost credibility. In an effort to refocus the company, Chambers said that “we will take bold steps and we will make tough decisions.” Clearly one of these decisions involves killing the Flip video camera business.