Networking giant Cisco will close its Flip video camera business and sack 500 staff in a move that is set to have ramifications in Australia.Tipped by ChannelNews a week ago, the move could result in the Cisco consumer division in Australia, which is headed by Todd Lynton, being axed with sales of their existing networking products moved to distributors.
The move to dump the Flip comes only two years after Cisco’s 2009 purchase of Pure Digital, original maker of the Flip camera, for about US$590 million.
In Australia Lynton, a former Olympus executive, spent millions, building out large in-store merchandising displays for Flip inside Dick Smith stores, a move that his competitors said “was over the top” for the returns that the Flip camera would deliver for Cisco.
A JB Hi Fi executive said that Flip was a poor seller. “The camera has nothing going for it, everything that that camera can do which is primarily shoot 1080p video can be done with a lot of Smartphones and compact digital cameras today” said.
Retailers claim that Cisco failed to realise how booming sales of smartphones with built-in HD video cameras obviates the need for the need for single-use video camera’s even cheapies like the Flip.
The move follows CEO John Chambers’ warning at an analyst conference that coming “streamlining” and “trimming” exercises could involve dropping some consumer products.
Cisco said it will also integrate its Umi product, a home version of its video conferencing system, into its business-oriented TelePresence product line.
Late last year during an interview with ChannelNews, Lynton, the Managing Director of Cisco’s Australia’s Consumer Products Group said that he was confident that he could launch the new video conferencing system prior to Xmas but this failed to happen.
Cisco Australia who appointed Lynton 12 months ago is chasing further growth in the camcorder market with the launch of new Flip cameras including an 8GB third generation model that swaps the existing 2x AA battery for three AAA batteries for longer battery life.
As a December 2010 Cisco Australia has lifted their share of the handheld Full HD camcorder market to 45% via aggressive point of sale marketing in stores like Dick Smith and specialist camera stores.
More to follow.