The Tragic Death of the Flip

http://pogue.blogs.nytimes.com/2011/04/14/the-tragic-death-of-the-flip/

by jsavimbi • 15 years ago

143 63 15 years ago

pogue.blogs.nytimes.com

bpeebles3• 15 years ago

This article doesn't mention it directly, but after reading the bit about the FlipLive makes this more likely to me: the wrong people in Cisco finally realized what Flip might be able to do. Which is replace Cisco's teleconferencing enterprise business. And doing so even a little bit would probably cost them a pretty penny, so they're dumping it to protect what they see as their "core" business.

hammock3• 15 years ago

Sounds like an opportunity for ... dun dun-dun dun! an entrepreneur! Who wants to build a prototype with me?

tomsaffell5• 15 years ago

There was never any risk of v1 of FlipLive cannibalizing the teleconferencing business - it was one-way only - no way for the 'viewers' to send a stream back to the publisher's camera. BTW - I wrote some of web software (the ActionScript) for FlipLive.

bpeebles3• 15 years ago

Interesting, yeah I hadn't thought through to the two-way part of it. And I might be totally off-base, but it just felt like it maybe it we edging close.

riverlaw• 15 years ago

can you explain some of the thinking behind the flip slide? It was bigger and didn't add much function. Thanks

Duff• 15 years ago

The whole premise of Cisco's teleconferencing business is maintaining the illusion that that it has to be expensive to do -- which isn't true for 80% of the market at least.

Cisco won't make billions on peddling their stuff to the 20% of the market who has a few million to drop on a telepresence system.

njharman2• 15 years ago

2 one-way connections == 1 two-way connection. Both sides just need flip and something to view it on. Even if that something was gold plated it would be cheaper than "enterprise" conferencing systems.

timmaah• 15 years ago

If the FlipLive was to debut yesterday, certainly there was inventory to back that up. What kind of lead time does production of that have? How much extra $$ did cisco blow by killing an in production product the day before it launches?

bpeebles3• 15 years ago

The initial reports said "Cisco said the shutdown of Flip will result in restructuring charges of up to $300 million this fiscal year". See http://www.industryweek.com/articles/cisco_closing_flip_busi... for example.

I assume that might include the money to stop production/get rid of inventory they don't want to sell/whatever.

anigbrowl2• 15 years ago

There is something very shady about the whole thing. I have worked in video (production) for most of the last decade and the flip was the hottest thing to hit camcorders since the invention of mini-DV. Phones and digicams also do video, but do not compare well for a variety of reasons. Flip hit a certain sweet spot that other products do not, and was poised to continue capitalizing on it.

You pull the plug on a product when you start losing money on it, not because you can see marginal net going to zero several years in the future. I would very much like to know the inside scoop on this one.

pointillistic• 15 years ago

The only reason Cisco bought Flip was because in theory it promised to push more bytes through the pipes and hence the routers. I don't believe the product itself had a noticeable impact on the pipes, i.e. the smartphones are not a direct competitor to Flip by they push more junk through the pipes. So in this regard the Flip became a useless distraction for Cisco.

Still why kill it? May be 550 workers are too much of the burden. This is criminal.

hammock3• 15 years ago

There’s a second part of the tragedy, too, something that nobody knows. That new Flip that the product manager showed me was astonishing. It was called FlipLive, and it added one powerful new feature to the standard Flip: live broadcasting to the Internet.

That is, when you’re in a Wi-Fi hot spot, the entire world can see what you’re filming. You can post a link to Twitter or Facebook, or send an e-mail link to friends. Anyone who clicks the link can see what you’re seeing, in real time-thousands of people at once.

---

That's awesome and so sad!

tomsaffell5• 15 years ago

FlipLive is kinda awesome, but as you said... when you’re in a Wi-Fi hot spot... Personally, I cannot think of too many occasions where the average person is: 1)in range of wifi, 2) has something worth sharing with an audience who are available there and then, 3) wouldnt rather use Skype video conferencing so as to get two-way communications. There are a few, but I'm not sure there's enough.

hammock3• 15 years ago

More than 40 hours of video uploaded to youtube every second of every day. A good portion of it is people just sitting in their bedroom talking about all the stupid shit they just bought at Target. And if they could record and upload in one easy step, that's a huge market right there.

hkuo• 15 years ago

I think the main difference is that with Flip Live, you would be able to broadcast a public live feed to a large audience. So basically more like Ustream (one to many) than Skype (one to one). And normally, Ustream users show a live feed from a single fixed webcam, while this would have added an aspect of mobility.

eli• 15 years ago

Forget about live, I'd buy a flip that had the ability to automatically upload its videos whenever it's in a hotspot and save to card when it isn't.

InclinedPlane• 15 years ago

Most modern smartphones have the ability to turn into a wifi hotspot.

dagw• 15 years ago

My phone is a wifi hot spot, and is always within range.

eyeareque• 15 years ago

While that is nice, couldn't (and isn't) this possible on any smart phone with 3G/4G and a video camera?

tremendo• 15 years ago

Yes, http://qik.com/ (not affiliated, not a user, but it seems to do this).

fletchowns• 15 years ago

http://ustream.com also has an app that can do this

justin• 15 years ago

Justin.tv has an app that can do this

dean2• 15 years ago

Yes, but most people don't have smart phones.

From the article: "Of the one billion cellphones sold annually, a few million are iPhones. The masses still have regular cellphones that don’t capture video, let alone hi-def video. They’re the people who buy Flip camcorders."

absconditus• 15 years ago

You mean like a webcam?

GuoQiangBen2• 15 years ago

As someone who has had to do a lot of live streaming to the internet via webcams/camera setups the FlipLive sounds amazing. If it was really as user friendly as the traditional Flip camera (which was a great product and I'm sorry to see go) it would have gained at the very least a sizable niche following, especially with the burgeoning lifestream movement. Its a pity that this is not going to be released, but theres a great startup opportunity here for anyone looking for one.

bediger2• 15 years ago

Are you a "cam girl"?

GuoQiangBen2• 15 years ago

haha rereading my post I guess that would be my first thought too - I actually do some recording of events for my university. And its a real bitch trying to get the equipment functioning, a plug and play like option would be ideal

marze• 15 years ago

I wonder what the practical consequences are for the decision maker(s) who wasted $650M corporate funds buying then dumping Flip?

Luyt• 15 years ago

I think they'll get a fat $2M bonus this year, for their strategic insight that Flip technology should be incorporated in Cisco.

joebananas• 15 years ago

I don't see what's so tragic about the death of a consumer device that don't really sell.

crystalis2• 15 years ago

Do you also think we'd be better off without the many van Gogh paintings that didn't sell during his lifetime?

danudey• 15 years ago

Well if they were mass-market prints that cost a lot of money to make and didn't sell well enough to recoup their losses, I certainly wouldn't complain too much when they were cancelled because they were unaffordable.

zacharycohn• 15 years ago

Terrible argument - Flip cameras aren't suddenly going to become valuable in 200 years. Or 50. Or 2.

jseliger• 15 years ago

I haven't seen any evidence that it didn't sell -- mostly, it appears to be the victim of entering Cisco's maw.

It's highly unlikely, at least to my mind, that Flip would grow to the point of taking over the world, but it's easy to imagine that it could've kept going for a long time if Cisco hadn't axed it.

tylerhwillis• 15 years ago

From the linked article above:

"Flips now represent an astonishing 35 percent of the camcorder market. They’re the No. 1 bestselling camcorder on Amazon. They’re still selling fast."

heyitsnick• 15 years ago

The whole crux of the article is that it did sell, and that sales hence could not have been the motivating factor for cisco cutting it.

Retric• 15 years ago

It was the Market leader with 35% of the camcorder market.

Anyway, they killed the product in the most expensive way possible. If they wanted to save money they could have just cut the R&D budget, reduced production and quietly sold off their inventory. Instead they waited until a few weeks before introducing the product before killing it.

PS: As to why: They make far more money pretending that video conferencing is difficult. N flip phones + N laptops (which people already have) + wifi = 2, 3, or 4 way videoconferencing on the cheap.

dean2• 15 years ago

"They make far more money pretending that video conferencing is difficult. N flip phones + N laptops (which people already have) + wifi = 2, 3, or 4 way videoconferencing on the cheap."

You're probably right. Maybe Cisco realized they were in an Innovator's Dilemma situation and they are just trying to delay the disruptive innovation, and its attendant lower margins, by buying the Flip and killing it.

AJ007• 15 years ago

Don't buy companies and kill them. The next time cisco offers to buy a company, the owners may think twice. That is what happened to Yahoo.

pigboy• 15 years ago

American "free enterprise" at work. Why some people worship this nonsense is beyond me.

rudee• 15 years ago

Yahoo:Delicious = Cisco:Flip ?

99993• 15 years ago

Yahoo:Delicious::Cisco:Flip

angusgr• 15 years ago

Phil Torrone at Make made a passionate if somewhat optimistic call to Cisco to open source the Flip tech now it's being killed off:

http://blog.makezine.com/archive/2011/04/rip-flip-camera-hey...

Although if it was a technology acquisition, as TFA speculates, they're even less likely to do that.

99993• 15 years ago

Tragic, but necessary, we all knew where they were heading:

http://www.youtube.com/watch?v=M6hB9NTYD0E&feature=playe...

ericd• 15 years ago

I'm kind of curious why, if they were profitable as this seems to imply, they wouldn't just spin it off as a subsidiary. If it wasn't profitable, perhaps they tried to sell it and failed.

One of the theories for shutting this down that I've heard is that having consumer electronics companies lumped in with the rest of the company lowers the margins, which is a bad thing in the eyes of Wall Street analysts. Cisco stock price took a huge beating (20%) this past quarter when their margins dropped by a couple percentage points, and I believe they're scrambling to get those numbers back up. Seems they're "reorganizing" Linksys as well, probably to get margins up there as well.

mayukh• 15 years ago

The story of the flip is fascinating. It was launched at the perfect time : camcorders were expensive and difficult to use. Hardware was cheap, youtube was growing like crazy and here came the flip that took advantage of all these trends to create a product that became a super hit. But it had a short shelf life with the launch of the iphone 3gs and other smart phones that could essentially do the same thing. To me the flip is a great example of a company that identified a profitable niche took advantage of industry trends and made max $$ in the few years that it was around. Too bad, cisco you were too late to the party.

wazoox• 15 years ago

Another sad story of a dinosaur trying to buy the innovation it couldn't build itself, and failing miserably in the end.

derrida• 15 years ago

Why do they kill this if it is profitable? Why not just give it to the employees?

GFischer• 15 years ago

The article starts on a false premise:

"The masses still have regular cellphones that don’t capture video, let alone hi-def video"

I happen to live in South America, and.. surprise, surprise.. everybody (that wants one) has a cell phones with video capabilities. They're beyond crappy, sure.

The 2nd most sold cell phone in Argentina and Uruguay by mid-2010 was the Nokia 5130, and it does video (Video recording at up to 176 x 144 pixels and up to 15 fps):

http://www.gsmarena.com/nokia_5130_xpressmusic-2569.php

The year before, the 2nd biggest seller was the Nokia 5200, which also does video (it sold millions of units here, was the most desired by teenagers, and even I had one :) ).

There are also millions (in units sold) of Chinese knock-offs you in the 1st World don't know exist, with video capabilities, built in TV tuner, dual SIM and more. I've seen them all across South America, from Peru to Paraguay to Argentina, Brazil and Uruguay.

The top seller was the Nokia 1208, just because it's the cheapest and simplest, but most of the other entries also do video (The Sony Ericsson W205 A, Samsung GT E2120, LG KP 570 and the other Nokias). No iPhone in the top 10 sellers.

The second point they make is I suspect wrong as well: "They’re the people who buy Flip camcorders". I had never seen or heard about Flip before its death.

Main source (Spanish):

http://fortunaweb.com.ar/cuales-son-los-10-telefonos-celular...

The Tragic Death of the Flip

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