Cisco Ditches Flip and $590 Million

darthcamaro writes "Remember the Flip? When Pure Digital Technology first came out with the device it was one of the hottest gadgets, providing users with an ultra-portable camcorder. Then Cisco came along and bought the Flip for $590 million in 2009. Now less than two years later, Cisco is throwing the money, 550 employees and the Flip out the door." Wired has an analysis of why Flip floundered. I hope this means I can find a AA-powered Flip UltraHD for $50 in a clearance bin.

Comments

Re:This is what companies do

[Ruke]

Cisco doesn't need to sell Flips in order for the purchase to be profitable. It's highly probably that they purchased Pure Digital in order to strengthen their patent portfolio. If the iPhone or Android devices make use of some inane portable-video technology that Pure Digital patented in designing the flip, it's possible for Cisco to make back their money in licensing agreements with other hardware manufacturers.

Re:Yet again another product that I never knew abo

[Tackhead]

They started as Pure Digital, a company that made a solid-state battery-operated "disposable" camera (20 minutes, 128 MB flash), and camcorder, both of which were eventually hacked. The business model was that you'd pay CVS $20-30 for the camera, fill it with 20 minutes of video, and return it for "processing", where CVS would use a device with a proprietary USB connector and software that knew what key to use to handshake to the device to extract the video, burn it to CD for you, wipe the camera, and put it back on the shelf. (much like a "disposable" film camera.)

The company was understandably miffed about having people going into their local drugstore and buying what would have been a $50-100 gadget for $30. Pretty neat devices. Very lightweight, and rugged as hell. At $30, perfect for strapping onto balloons, kites, and model rockets.

Miffed as they were about the disruption of the business model, they actually didn't get overly litigious about it. They didn't have much of a legal leg to stand on, so they basically asked really really nicely for people to stop, while updating their single-use devices to be a little harder to hack. (It took the community a couple of years to crack the newer firmware, and by that time, the devices, even at $30, were obsolescent.)

The "reusable video camcorder that offers 2-3 times the quality, a zoom lens, and 30 minutes of storage" version of the single-use device became the series known as the Flip. The Flip was an unencumbered version of the grocery store disposable units, featuring more storage and higher resolution, and even at retail prices, if you needed something rugged, lightweight, cheap to power, and still cheap enough that it's not the end of the world if the rocket gets stuck in a tree or your RC aircraft faceplants into the dirt, it was still pretty good value for the money.

Re:Can I be the first to say...

[lostchicken]

The brilliance of this is that even if the Flip itself flops, Cisco still wins in the long run. As long as the Flip and the insane marketing hype surrounding it increased the popularity of HD video sharing on the web, people are going to need more routers in the network itself. I wonder who the ISPs and YouTubes of the world will be going to then...

Cisco never needed to sell the Flip as a physical product, they just needed to sell the idea of shooting LOTS of video and sharing it across the web. It seems like they've succeeded.