Cisco Ditches Flip and $590 Million 121
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.
Can I be the first to say... (Score:1, Funny)
...that the Flip was a flop?
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No, because it's already in the headline of the Wired article.
Re:Can I be the first to say... (Score:5, Interesting)
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.
Re:Can I be the first to say... (Score:4, Insightful)
1/2 Billion is a LOT of router and switch sales to make up.
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I don't think they threw away the entire 590 mill here.
For example, they might have obtained some valuable patent assets.
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from my googling, there really wasnt anything at all. The flip was not unique and had no unique technology in it. it was a standard camera turned sideways with a stylized case. Canon and Nikon had similar features at the time in a very similar form factor except that they had a much lower frame rate on the video.
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Why does Cisco buying them have anything to do with that? The product was a huge hit before they bought it. Cisco owning it didn't add anything.
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They paid for a MASSIVE advertising push.
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Most likely they will go to Juniper, Foundry Networks and them (the ones specializing in ISP-size network gear) or HP and Netgear for their datacenters (Google supposedly builds their own switches but why spend $5,000 on a gigabit switch if $1,500 will do). Cisco is imho overpriced, has major licensing issues and doesn't deliver on their promises of either product or support but still tries to sell you their whole product line for each problem. Cisco is the Microsoft of network equipment - all the bigwigs h
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Yet again another product that I never knew about. (Score:3, Insightful)
I cannot be the only person here who thinks maybe that the company problem is that I was never aware of them?
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I thi
It was plastered all over public transportation.. (Score:1)
In Chicago, they had a really cheesy advertising campaign that had adverts plastered all over CTA trains and stations for at least 6 months, probably a year. They should have taken all that advertising money and pooled it into some good interaction designers for an interface reboot. Besides, if it can't connect to the web, who cares about it. I remember seeing the adverts and predicting a massive failure, but I can't say I'm glad to see $600,000,000 wasted.
Target demographic? (Score:2)
In Chicago, they had a really cheesy advertising campaign that had adverts plastered all over CTA trains and stations ...
So the target demographic for the product was riders of public transit?
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It's a cheap camera, not a high-end one.
That said -- I see a lot of people in suits on the train from Lakeway into downtown Austin around the 9am and 5pm runs. Maybe you should rethink that whole public transit stigma thing.
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The less I made, the better I dressed. Actually, I guess it was more like a bell curve if you count the McD's job. But, when I was making $8.11/hr way back in the day, I wore fancy silk ties and a silver tie clip and rarely had $20 in my pocket the day before payday.
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Fair 'nuff. Given as Lakeway isn't exactly a cheap place to live (median household income $86K), I doubt that's the mechanic at work here.
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Fair 'nuff. Given as Lakeway isn't exactly a cheap place to live (median household income $86K), I doubt that's the mechanic at work here.
Ugh -- I had "that stop beyond the furthest I ever go" wrong; it's Lakeline, not Lakeway. Still not the slums by any means, but not at all the same demographic.
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Did you see the video of Anderson Cooper being attacked in Egypt? He's carrying a Flip camera in his hand. I think much of the grainy video you saw from that time was from Flip cameras. They are very discrete - much more so than any other sort of HD camera - and don't require you to have your smart phone with all your contacts, notes, personal information, etc., out in your hand where it can be grabbed by a passer by.
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Maybe where you live only the poor take public transportation, but not every city is saddled with a crappy system.
I've been in exile to the San Francisco Bay area at the moment.
Back in the day I lived near enough Chicago (southeastern Michigan) to visit there from time to time. It was one of the few cities that had mass transit usable and safe enough that the better off would consider using it. A well designed system.
I considered mentioning in my post that Chicago might be an exception. But I left the ar
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Still not as braindead as umi.
A device that could be replaced by skype and a 50 webcam (ok, so that's not as premium, but it is good enogh).
Now the stupid part, if you choose our product, you'll get to pay $25/month for access to less people.
This means, to talk to a relative or a friend, you are looking at $50/month, and these are people that already have internet (and therefor presumably compters). I have seen some real computer illiterates figure out skype, so I don't think they even have ease of use goin
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Besides, if it can't connect to the web, who cares about it.
People who just want adequate quality home video of their kids, family, holidays, pets and so on, and don't intend to share it with the whole fucking world on bastard Facebook?
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The point is they are fast to use and take great video. I'll pick up several while they are in stores and pack them away for the future. It's sad that such a great product gets dropped.
What you describe is exactly why we bought them for ourselves as well.
Its also exactly why ours haven't been used since the iPhone 4's video camera came out. Sure, the phone is missing image stabilization (btw, WTF Apple) and the quality isn't quite as good, but those facts are well-mitigated by the fact that I always have it with me... exactly the same thought process used to justify the Flip vs. an HD-capable-SLR.
Anyone who could make the leap from complex->Flip will, or has, made exactly the same lea
Re:Yet again another product that I never knew abo (Score:5, Informative)
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 [i-hacked.com] 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.
Business plan waiting to FAIL (Score:3)
Okay, to me this just sounds like a business plan waiting to fail. If the marketing dept (or whatever dept that comes up w
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What are you talking about? Every CVS, Walgreens, Kinkos, Walmart, etc., has photo printing. You take in a memory card rather than film, but it's the same business model and for the same reason: most people don't find it worth the bother and expense to have print making capability (whether that be a darkroom or a photo printer) at home.
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That's not quite the same; for one, how many digital printing centers require staff? Heck, I've seen some where you can pay directly at the terminal. For another, even counti
Re:Business plan waiting to FAIL (Score:5, Informative)
It's worse than that [forumer.com]... the MBAs must have paid the engineers peanuts and lit a blowtorch under their asses to ship it, because the "security" on these was laughable (the one thing they had going for them was a Funny Plug(tm) that wouldn't fit a standard USB cable); it took several revisions before the software security measures presented so much as a speed bump. How do I hack thee? Let me recount thy ways...
1) The camcorders used a 128 BYTE(!) challenge/response system to unlock the device over USB. But the first-gen units used the SAME keypair for every device! So extract the key from one, unlock them all.
2) The key could be extracted by desoldering and reading the Flash chip, or... just asking the device nicely! The challenge key and expected response were stored consecutively in memory; you would request the challenge key in 4-byte(?) chunks, and after the 32nd chunk, respond with 32 chunks of response key. But if you instead just kept requesting chunks after the 32nd, it would GIVE you the response key.
3) Eventually they fixed this. But there was still a backdoor / "default" key, leading to the very popular "battery drop" method of unlocking cams. The response key and other housekeeping data were stored in an NVRAM area (actually IIRC just a file called nvram.dat) - if the camera ever failed to boot, it assumed it was a crash due to corrupted NVRAM and replaced it with a known default copy. Letting the batteries drop out about a second after hitting the power switch would replace the response key with a "key" consisting of the imager manufacturer's name spelled backward and then forward.
Eventually (being IIRC a couple *years*) they fixed all of these. You could still do it by shorting pins on the Flash or erasing part of it via external hardware, but the easy point-and-click software hacks were shored up. There was still debate as to whether the keys were algorithmically related to one another or one-time-pad random. Until...
4) Somebody discovered PD left details (possibly code) of the keygen algorithm on their anonymous FTP server! It was pulled before I got a chance to see it ;-) but it was enough information that somebody wrote a tool to bruteforce a master key of some sort, which took a few computers about a week or 2. With the master key found, hackers just updated the GUI software to generate proper response keys, prompting PD to release the "please grant us a Mulligan" letter linked by the GP.
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And this is why the MBAs are raking it in and you're not. After all, their scheme worked well enough for the company to survive for many years and eventually led to a $500 million sale.
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It's not just the fact that smart phones did it (Score:5, Insightful)
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I keep my FlipHD in my computer bag anyway...
I figure I never know when I'll need a couple hours of HD footage.
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Plus, given your work with the Phoenix Foundation, you never know when you might need a few batteries, a video camera, and a small LED display to create a remote drone, or a listening device, or an electronic lockpick, or ...
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Smart phones do a lot more but they're hardly more convenient.
If you want to record with a Flip you press the power button then the record button and it's recording. That's it.
If you want to record with a smartphone you first press the wake up button, enter the password (because if you don't have a password, frankly you're stupid and deserve all the crap your Facebook/blog/email/IM/whatever will get from "friends"), find the right application, launch it and wait for it to come up. Then press Record.
With the
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So what do you pay for this convenience, like $1000 a year? No thanks.
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Intriguing.... Are revenue/expense numbers for the flip dept publicly available?
Chambers is right that flip meshed with Cisco's core business (of charging eye-popping markup).
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correction:
Chambers is right that flip *never* meshed with Cisco's core business (of charging eye-popping markup).
They actually were pretty good (Score:1)
I remember when the Flip was hot (Score:2)
But I bought a Kodak Zi-6, which I'm still using. External memory and runs on two AA batteries. Flip was all self contained and not all that interesting, considering the limitations.
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the Flip battery pack can be pulled out and you can either use 2 AA's or 3 AAA's depending on the model. that was one of the selling points for me.
The main selling point for me as i was getting it for my wife - is that the flip is extremely simple to use - and has very good optics even in low light - and requires no user intervention to get a good video. All she does is hit the power button and the big red button - hell my 1 year can use it.
No great mystery (Score:3)
I was in the market for a small portable video camera when we had a baby on the way and was looking at the Flip. Then the iPhone 4 came out with HD recording and I got that instead and I'm glad I did, the video and photo's I shot with it are great for my purposes and it's always there in my pocket. They released a single purpose device just when multi-purpose ones were catching up on their area of expertise. Though break.
As an owner (Score:2)
Why don't digital cameras/DSLRs work as webcams? (Score:2)
This is (slightly) offtopic, but I'll take the hit. It seems strange to me that digital still cameras and DSLR cameras don't offer webcam functions, at least I haven't found any that do. Thy typical have a much better sensor, lens and optical zoom than any dedicated webcam; can record high resolution video and connect as a USB device. So why is a USB webcam mode not incorporated?
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Same here...
I got both a 10mp Still and full HD Camcorder, yet for a webcam I'm stuck with a grainy 1.3mp webcam.
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Because that costs money and doesn't make any sense. In the $100-$300 P&S market, adding cost to your device to compete against $20 webcams puts you a competitive disadvantage in seriously cutthroat segment of the market. In the $300-600 P&S/Compact market, you could probably put such a mode in and get away with it... but who is going to buy it? That's the entry level for the serious photographer and videographer. Above that, in the compact/SLR range
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Guesses:
1. You need an external power supply.
2. Most web cameras are modest in their data requirements. Can you imagine how much your ISP would love you if you had an HD camera on your bird feeder?
It is an interesting point, however. Many cameras can be used in 'teathered' mode where a computer pulls data off the camera as fast as it's generated. My DSLR doesn't do video, so I don't know if tethered video is a possibility.
Throwing $590e6 out the door? (Score:3)
I like how the Wired article calls its appearance "retro." I blame it on the click-wheel-inspired design. Man I hate the clickwheel, and always did. It's still polluting the design of non-Apple mp3 players to this day. Please, please give us real clickable buttons, far enough apart to operate through a jacket pocket.
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I like real clickable buttons for many things, but for things like volume or scanning through a long list, the click wheel is really usable..
plus, at least my 5G iPod still has buttons for next/previous below the edges of the click wheel.
This is what companies do (Score:3)
Cisco bought TGV which made the best TCP stack for Win 3.x and which was making a fast stack for 95, then turned them into a cable modem lab... hmm, OK.
Re:This is what companies do (Score:5, Insightful)
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I worked in that shop and you are confused. The cable modem people were not the windows people, and TGV was mostly about the VAX.
I worked in that shop too, and you are the one who is confused. The windows stack project was terminated before I stopped working there and everyone on it either quit, took a job doing CMs, or took a job at corporate and started driving over the hill for work. I had three managers in under six months as they tried to figure out WTF they were doing with that office. AFAIK it is now closed, that was the plan back then anyway and I don't remember seeing a Cisco logo on my last drive down Cooper street.
I was th
Market shift and Cisco incompetence... (Score:4, Insightful)
However, it really doesn't help that Cisco did surprisingly little with the company after they acquired it, and some of what they did do was questionable. The 'Slide' model was rather pitiful, their experiments in replacing the simple tried and true physical buttons with (lousy) touchscreens were failures, and they stuck with a price tag that was always hovering dangerously close to more capable devices. Other than a few incremental spec bumps there was almost no development of the product line for two years.
Here's how stupid corporate feudalism works (Score:2)
That's the sort of bullshit we are training our MBAs to do - teaching them t
For the last time... (Score:1)
Nobody wants video conferencing... Heck people don't even want to *speak* to each other. There is no mass market in it...EVER... Every company who tries fails...
And people are not stupid... if they want video conferencing they'll buy a $60 web cam and use skype or MSN for free...
The mass market will NOT accept hundreds of dollars on hardware and recurring fees to use a service that does not need to exist on top of that.
Who wants to pay monthly for the priv
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Apple seems to be making a pretty good go of it.
QVC had a super sale on Flips (Score:2)
Great camera for budding film makers (Score:2, Informative)
Flips were durable as hell. I gave one to my 10 year son a one and over the years it has twice spent 1+ weeks in the yard in rain and snow and both times it started right up no problem. Not bad and absolutely perfect for a kid into making movies.
pointless (Score:3, Interesting)
I'm not sure why CISCO bought them, I'm hoping for some codec or patent rights or something. Otherwise that product was a total failure.
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This was a bad idea at conception. (Score:2)
I can't defend this product. I can't justify it's existence. I can't possible fathom the price of the company or the product.
Even MS kin had more going for it.
Better Products Available (Score:2, Informative)
I almost got my wife a Flip this past Christmas as a more convenient way to take videos of our 2yr old without having to haul around a full fledged camcorder. I ended up getting her the Kodak Playsport instead. It was less expensive (think I paid about $120), it is waterproof (major plus since little ones have a tendency to spill things), and the reviews were better. The wife loves it, and the 1080p videos are MUCH, MUCH better than what either of our phones can do (even on the highest setting). The only
No connection to the 9k series camera (Score:2)
used to work there (Score:2)
and this makes sense. When they were getting acquired they were dumping tons of cash into looking like the hot shit for cisco, but I think they all knew the concept would get eaten alive by convergence. The mood I felt was, lets sell this to Cisco before they catch on that this market is doomed.
Not surprising (Score:2)
Done in by point and shoot cameras (Score:2)
Some say smartphones did in the Flip, but when it first came out, cheap digital cameras were already able to do what the Flip did and more (and with better quality), in addition to being expandable with SD card memory.
I'm not sure that is exactly true. My 2007 vintage P&S did have better optics, including optical zoom, but video was stored inefficiently and for limited duration as motion JPEG. That meant there was some advantage to using the Flip for longer but less demanding video. Pretty weak market position though, and it's totally gone now. Current P&S cameras record H.264
will the responsible person, cisco ceo, get hit? (Score:2)
the ceo will, after wasting 600 million or so of the shareholders money on a flashy product with no future, will get a bonus for shutting it down.
the shareholders put up with it, they deserve what they get.
Dammit (Score:2)
FAQ (Score:3)
From Cisco's FAQ [cisco.com] about the acquisition:
Q. How will Pure Digital’s products be sold and serviced?
A: For the time being, Pure Digital will continue to sell their product as they do today, on the web, via retail stores and through on-line retailers. Together Cisco and Pure Digital will work to expand sales opportunities for these exciting products.
Q. How will Cisco and Pure Digital customers be affected by the acquisition?
A: Cisco often acquires companies that can accelerate the development of a product, technology or platform. With Pure Digital, Cisco acquires consumer-friendly video products and technology, as well as a brand with mass-market appeal. Pure Digital customers will continue to receive the same great products and technology they are accustomed to receiving and will experience no negative impact in terms of features or service.
So much for truth in marketing.
Woot! (Score:2)
Cisco is missing on their switches and routers (Score:2)
I've not seen anyone here talking about Cisco's CORE products: Switches and routers.
Right now, Cisco is seriously missing on 10G networking. Their products suck ass compared with Juniper and Arista. Others have really great stuff out there too right now (Brocade, Extreme, Force 10).
They totally bailed out of Infiniband because their products were poop. It's a small market, but we use it here because of HPC.
The simple fact is that shortly after when Cisco shipped their 3750-E switches Juniper shipped th
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Capitalism at work. (Score:2)
capitalism doesnt solve any issues of organization size. it just rationalizes them.
good riddance (Score:4, Insightful)
TFA missed a very important reason: no SD expansion slot.
Every single time I saw them on a store first thing I did was check if there was a way to expand memory with SD card. Nope?... well, ain't buying it then.
Ridiculously Simple Answer (Score:2)
Smartphones are $30 forever, Flip is one time cost (Score:2)
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GoPro Video Cam (Score:2)
Not surprised (Score:2)
I remember an interview from a manager saying that Flip's strong point was "ease of use", and then he proudly added that the new Flip would be HD. .. it was still missing motion compensation! A feature which would improve the videos while keeping the "ease of use".
But
HD improves the videos too, sure, but it isn't easy to use: it has the side effect of making the vidoes more difficult to share and to more difficult to edit (need a more powerful PC), that's when I realised that they didn't capitalize on their