Two years after paying $590 million for it, Cisco Systems Inc. is shutting down its Flip video camera unit. In the dramatic move, the company will cease all production of Flip Video products globally, but has said that it will support the company’s FlipShare service for existing customers, while it formulates a “transition plan.”
“We are making key, targeted moves as we align operations in support of our network-centric platform strategy,” said John Chambers, Cisco chairman and CEO. “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.”
In March 2009, Cisco acquired Pure Digital as part of a push to expand beyond its traditional business of selling high-end networking gear to giant corporations. But the Flip’s popularity began to wane as consumers embraced smartphones like the Apple’s iPhone and phones using Google’s Android software. Generally, such phones contain high-definition video cameras, eliminating the need to purchase a separate device.
In addition to dropping the Flip, Cisco is laying off 550 employees-one of the “bold steps” that CEO John Chambers says the company is taking to reorganize its business.