Companies restructure all of the time. But do they usually dump successful product lines in the process? Good question.
So why is networking company Cisco getting rid of its line of Flip mini video cameras? According to the Consumer Electronics Association, sales of mini video cameras grew from 4.5 million units shipped to retailers in 2009 to 5.7 million in 2010. Sales are projected to continue to rise in 2011, an estimated 6.5 million units.
Does Cisco know something that we don’t know?
- There’s competition in the category from the likes of Sony, Kodak, and other brands. Maybe Cisco’s share of the pie isn’t big enough? Maybe profit margins are even slimmer than they are in most electronics categories?
- Lots of folks are using their smartphones’ camera features. I mean, why fork over $150 for a Flip when smartphone video features are free?
- Isn’t it easier to just use our phones to do more things these days, making it unnecessary to buy additional electronics?
Here’s the thing: Mini video cameras are easy to use. They‘re light, fit easily into a pocket, and let people capture good times in a quick and enjoyable manner. Plus, they have more video camera features than a smartphone. And, oh yeah, some people can’t fork out big bucks for the iPhone. Lastly, it’s obvious people like the Flip and its competitors because they’re selling.
What do you think?
- Is Cisco being too hasty in dumping the Flip?
- Do you think mini video cameras are already getting passé?
- Do you use your smartphone as a video camera or do you prefer to use a small mini video camera?
- Do you believe in “doing more with less” and decide against purchasing the latest and greatest consumer products?
I’d love to hear from you.
Tags: customers, Marketing, Strategy and Tactics
I have a Flip and a Zi8. They are great little devices but they are fatally flawed in today’s connected world. They have no ‘upload to the web’ ability (without resorting to a file transfer to a connected device). I find this incredibly frustrating when using them and so I generally use my phone’s camera instead.
This is why they are ALL eventually doomed to failure and I am sure a networking company like CISCO has realised this.
Hi Glenn,
Thanks for bringing up a major point. Now it makes us wonder why a mini device wouldn’t have that capability in today’s world, doesn’t it? Maybe instead of discontinuing the product, Cisco might have come up with a new generation of the Flip that could upload its movies to the web to be shared with family and friends. Hmmmm…….
I have a Flip UltraHD and really like it. I have used it mainly when we go on vacation, but have used it for some quick work videos as well. It is easy to operate and the editing software is simple and straightforward. The only thing that would make it better would be a better zoom capability, but for most purposes that’s not a big deal.
Hi Jon,
It’s always great to hear from the people who actually own the consumer product in question. I appreciate your take on the Flip since you use it. It’s great to have a device that’s easy to use. Have you found Glenn’s point to be an issue? I’d love to hear from you about the fact the videos can’t be uploaded to the web. . .Thanks, Jon.
Cisco may be signaling that it’s foray into CE was not a great move. I have many years in the CE business and can offer these competitive dynamics:
1. Retailers prefer CE companies that provide full lines, both horizontal and vertical…more efficiencies in buying.
2. Distribution and marketing (everyone has the same sourcing costs) are everything. Perhaps Cisco is recognizing that its core competency is B2B marketing (explanation and ROI), not B2C marketing (attractiveness and immediacy).
3. Retail sales is quite a lot more complexity to manage than commercial sales.
Hi Mike,
Thank you for sharing your insights. They’re valuable because you’re a veteran of the Consumer Electronics business. Retail has changed dramatically and the purchasing function is well set and defined in advance with merchandised set plans. Yet, there is always room for an “item” if it’s a hot product. I’m sure Cisco has evaluated its entry into the CE business and made the determination it is not their forte, so better to pull out. Fewer, dominant retailers on the landscape are dictating terms that mean slimmer margins for suppliers, as well. It is a tough business and only sharp manufacturers will make a profit. That’s why many have taken to either bypassing retailers and selling direct in certain categories of consumer goods, or work with smaller e-tailers.
I love my flip phone. It is so easy to use. I carry it every where and constantly download video to YouTube and frequently show video of kids instead of photos to friend and family right from the Flip. When a phone can do everything I can do with my Flip including plug right into my usb port, I’ll buy it so I can carry one less device.
Perhaps, Cisco is already aware of such development in this area by another company??? But honestly, it is pretty clear that video cameras are not synonomous with Cisco…Canon, Nikon yes…but definitely not Cisco.
Hi Janet,
Interesting. Glenn pointed out the Flip doesn’t allow web uploads, but obviously you are able to do so. Did you have to purchase a separate plug or did it come with the device? Just curious. It seems that people who have a Flip love it. Easy to use, small and portable, does the job. What else could you want? And you’re right, Janet: video cameras and Cisco don’t go together in our minds: likely a good reason for the company’s decision to get out of this business. Thank you for sharing your experience and comments about the product, Janet.
•Is Cisco being too hasty in dumping the Flip?
I think so. It was a good brand, with good name recognition. And it appeared to be profitable. At the very least, why didn’t it sell the Flip to another company?
•Do you think mini video cameras are already getting passé?
No. There will always be a market for a simple, inexpensive product that does what it’s designed to do well.
•Do you use your smartphone as a video camera or do you prefer to use a small mini video camera?
I use my smartphone, even though I’d prefer a small video camera. Just haven’t gotten around to it. And the Flip didn’t appeal to me because I’d like an optical zoom and a few more capabilities than it offered. Actually, though, I’m probably more afraid of buying something with too many bells and whistles than too few. I’ve got a digital camera I seldom use (again, I use my smartphone) because it has way too many options and I have too much trouble figuring out what all the little symbols and squiggles mean.
•Do you believe in “doing more with less” and decide against purchasing the latest and greatest consumer products?
Definitely. The latest and greatest always costs more than it will in 3-6 months. Or the manufacturer will come out with a new “latest and greatest” priced the same as, or less than, the older model. Look at Apple. Plus, some products are introduced almost as betas, with the bleeding edge users expected to help debug the device. I prefer waiting 6 months or so for the price to come down and for it to be debugged. Then I’ll use it for years.
I’m not psychic, but I think there was a shift in strategy at Cisco and that the Flip line will be sold to someone else. It’s a great camera and very useful for its intended purpose.
Hi Don,
Thank you for posting such thoughtful answers to my questions. Love your insights. It’s likely the Flip product line is being shopped. Obviously, there is a market for the mini moviemaker, so why not find a buyer since Cisco is in transition? Quite right: love my iPhone and I use it for many functions, just as you do with your smartphone. Yet, like you, I do think there is a market for separate, pocket-sized cameras and the like. As with all new techologies, as newer models emerge, the price comes down. Let’s see if/when the Flip shows up under another brand name, Don. Or if the sale of the technology behind it gives birth to a new, more advanced model and brand. Isn’t it great to anticipate what’s coming next?
I think Don’s question of why Cisco did not simply sell the Flip division to someone else is the big wonder.
Flip definitely had the current marketing edge over its competition. Other brands of mini recorders are often publicly referral to as flip cams. Similar to Kleenex, Flip had successfully branded the entire industry niche with it’s own brand.
Flip did NOT have the technology edge however. Kodak is and was building a better product at comparable price point. It makes me wonder if Cisco saw that Flip was going to require a good amount of R&D in the coming year to keep pace with the competition and decided that it would squeeze the margins to tightly.
It also makes you wonder if Cisco is simply predicting that the life span of such products is too short. I struggle to see the logic in this because if something is making money (seemingly a lot) and you’ve got the brand edge, why not keep it going until you can no longer compete or at the very lease sell to someone who is willing to invest in it’s long term success.
Paul raises an interesting question of whether Flip will be sold. I fail to see the strategy of announcing the total discontinuation of a product line as a way of increasing it’s appeal to a potential buyer. By simply shutting Flip down, they have sent a value message to the world (they don’t see Flip as valuable so it’s unlikely that anyone else will).
It is an interesting move and only the future will tell us if we are all missing some great detail in the equation.
Hi Chad,
You’ve raised another good point. Thank you. With consumer electronics, the product just comes to market and R&D has to begin for the next generation. It is a huge investment. Especially if the first entry sells well, but doesn’t clearly indicate to the company it’s a profitable enough category for the future. And as Janet points out: if consumers don’t equate Cisco with mini video cams. The thing about electronics is that sales volume can be strong, but profit margins are slim. If retailers are looking for a lot of support dollars and concessions to shelf it, how much is left in the product for the manufacturer?
Hi Paul,
You’re probably right. The brand will likely be sold. Agreed: it’s a nifty little product and the market for it is obviously growing. Any insights, by the way, on where Cisco might be going? Just wondering what their new strategy is. Thanks for commenting on my post.
My previous post used the term “flip phones” and should have been “flip cams” (if the moderator can make that change )
Hi Ted,
Got the first generation, and then bought the most recent generation a few months ago with stabilization. I use it for our camera club and my Social Media business. The quality is great, easy to use, and as you mentioned fits in your pocket. There seems to be a convergence of technologies with the smart phone and DSLR’s with video now. going more to one device to do multiple tasks. My guess is that the growth is not there beyond 2011, unless they make it cheaper, better audio with better accessories.
Hi Blair,
Precisely put. Upgrade, add more bells and whistles for the next generation, lower the price or let your competitors who specialize in consumer electronics go for the next bite of the apple. Still, there is a market for easy to use, one size fits all mini cams for personal use? As for me, I’ll stick with my iPhone. . . .Thanks, Blair. Great comments.
Hello,
We were shocked to hear that such a great product would no longer be on the market. We recently armed our marketing department with flip cameras to capture student, faculty and staff content on a daily basis. We use the content to push out social media, instructional and informational messages to a variety of internal and external audiences.
I hope that they sold the technology and we will see similar products in the future. The flip was a convenient, economical solution and easy for anyone to use, and a better solution than the smart phone that all of us don’t have yet.
Hi Carol,
There’s nothing like hearing from the users of the Flip and how they use the mini video camera. I suspect many people will be disappointed it will no longer be available because it’s economical, simple and easy to use. And it works for their needs. Doubtless, it will be replaced by other brands. Not everyone wants to invest in some of the more expensive smartphones. If you can get the apps you want and need in a less expensive, simple device why not? Keep your eyes peeled, Carol. You can bet Flip will pop up under another brand name or it will be knocked off. No doubt, with upgraded features. Thank you for sharing your insights on the Flip with us.
Chad,
Yes, the Daily Fix editor can and did.
I received my “Dear Gwen” email today announcing that Cisco was getting out of the “Flip business.” I bought this little unit (UltraHD) back in December before going on vacation. I must admit I have not used it much, but the times that I have, I have been pleased with the product. I especially like the fact that I can take several pieces of footage and make a movie then email to family and friends. It does all that I expected because I read the capabilities prior to purchasing.
Admittedly, so, I am an electronic junkie but I do not use my BB Torch to record video or my BB Playbook, which would use up too much battery life. I have a Sony digital camera I use to take my more serious pictures but will use the phone or tablet for a little snapshot. There is no science behind it, but simply a choice of what is available at the time to capture images.
I do know that Cisco is undergoing organizational changes and there is a possibility of another major lay-off, if this in fact is true, then perhaps the “Flip business” was one of their weakest links!
Hi Gwen,
Thank you for commenting. I always like to get input from actual product users when posting about consumer products. You’ve articulated some good points. Everyone who has the Flip and who has commented here seems to really enjoy using the camera. Simple to use, fits in a pocket, relatively inexpensive. What’s not to love? It’s unfortunate Cisco decided to get out of this business, but as others have pointed out, there is a market for this item and competitors will likely continue to manufacture minis like this. And we wouldn’t be surprised if another company bought the brand from Cisco, either. So we need to stay tuned on this one.
Hi – I’m late in the conversation but my problem just came up because my Flip broke, and is one month shy of being in warranty. I found out they are not making any more or fixing this one! Ach. So – my opinion: I really, really like my FLIP. It does have a designated niche use – it’s great for skiing – holding while the group skis, for hiking, outdoor quick dog antics – it’s an easy grab & go. I have no trouble uploading – and I can then convert to my YouTube account.
It’s a good product. I hope some picks it up.