Cisco Shutters Flip Cameras Forever

Two years ago, Cisco spent nearly $600 million to acquire the company that makes Flip video cameras. Apparently that was a mistake, because the networking biggie announced earlier today that it will be shuttering its Flip division as it faces increased competition from video-capable smartphones.

In a statement from Cisco, it says that while the Flip division is being shut down, it will “support current FlipShare customers and partners with a transition plan.” We asked Cisco for a further explanation of what this means and a rep for the company says transition plans for FlipShare customers are still being worked out.

Upon its release in 1997, the Flip became very popular since it provided consumers with an affordable, pocket-sized digital camcorder that was very easy to use.

However, facing increased competition from imitators and cellphones with high-quality video recording capability, Cisco has opted to close Flip as part of a larger effort to refocus the company on its core business of computer networking.

“We are making key, targeted moves as we align operations in support of our network-centric platform strategy,” said the Cisco 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.”

No specific timeline was given for when the last Flip would roll off the assembly line, though Cisco did say it expects a reduction of approximately 550 employees in the fourth quarter of its fiscal year, which ends July 31.

Cisco Shuts Down Flip, Its Video Camera Unit [NY Times]
Cisco Restructures Consumer Business [Cisco statement]