Cisco is set to dump their entire consumer electronics division in Australia according to sources at Cisco Singapore, which is the regional office for the networking Companies consumer operations in Australia.
A source told ChannelNews “It’s not looking good”.
According Scott Jackson, Marketing Manager Consumer, at Cisco Australia staff has not been told anything other than what was in the recent announcement by Cisco Corporate.
“We know as much as you know. We only know what was in the official release. We know that home networking that has a big future for Cisco is being absorbed into other areas of the business”.
During the past 12 months Cisco Australia have struggle to get traction for their Flip camera which they acquired when they purchased Pure Digital for $590 million two years ago.
Shortly after the Pure, acquisition, the Vice President of Cisco’s Asia-Pacific Consumer operations, Craig Gledhill, who is based in Singapore, took an axe to what was then a highly successful consumer division at Cisco.
He dumped the then head of Cisco Australia’s consumer division, Graham Reardon, which back then was trading as Linksys and installed Todd Lynton, a former Olympus executive. He also switched the local PR to Text 100 from Bite who had been credited with growing the Cisco Linksys brand in Australia.
The first cracks in Cisco Australia’s marketing of their consumer division appeared when Text 100 ran a disastrous PR campaign based around an old Flip camera model. Instead of targeting soccer mums and people who could afford the $299 Full HD video camera the PR Company with the backing of Cisco Singapore targeted skateboarders and young teenagers who by then were already using their mobile phones to shoot video.
The decision by Cisco to axe the Flip division and sack 0ver 500 staff was made by Cisco CEO John Chambers who had to show he was doing something decisive to stanch the flow of earning out of Cisco.
In the second quarter of 2011, earning fell 18% while in Australia Flip had already flopped up against cheaper products from the likes of Sanyo, Toshiba and Kodak and above all Smartphone’s that are now capable of delivering full HD 1080p video.
When iPhones and Android phones began shipping with decent cameras for shooting stills, the Flip seemed excessive. When phones got HD video recording, the Flip was downright redundant.
Analysts claim that Flip would still be around if Cisco had bothered at all to adapt to the market. “After all, there are plenty of camera businesses like Canon that are still alive and well” said one analyst.
Ben Chen writing in Wired said that 18 months ago the writing was on the wall for the Cisco Flip when Steve Jobs introduced the camera-equipped iPod Nano in 2009, he made it clear that the Flip budget camcorder was Apple’s primary target.
“We want to get in on this,” said Jobs regarding the budget-camera industry, while showing a slide of the Flip at the 2009 iPod event.
Why buy a cheap camcorder if you could buy an iPod Nano that shot video, too? In addition to the Nano, Apple had already released the iPhone 3GS, also capable of capturing standard-definition video.
Eventually, a slew of Android Smartphone’s also shipped with video-capable cameras, and so did Apple’s iPod Touch. The iPhone 4 and others brought HD video recording to Smartphone’s, eliminating the Flip’s last possible advantage.
Suddenly, the notion of carrying around a cheap camcorder in addition to a general-purpose Smartphone or iPod seemed impractical — extra bulk in your pocket. A slew of general-purpose devices made the Flip irrelevant.
Chen said that the The Flip probably wouldn’t have been murdered so easily if Cisco had caught on to something that’s been trendy for years: real-time social networking. To make that work, the Flip would have required an internet connection.
You’d think that would be an easy addition, considering that Cisco is a networking company.
He said imagine a high-end Flip with a Wi-Fi or 3G internet connection, 1080p video, a decent zoom lens, and a touchscreen with apps made just for Flip video and photo. A solid, premium multimedia device would’ve enabled Flip to stand out among the “jack-of-all-trades” multifunction devices out there.