Cisco's Big Flip OffBy Pedro Pereira | Posted 2011-04-25 Email Print
Cisco is no Apple. While Apple’s consumer success is indisputable, Cisco’s attempt to touch the consumer with a cool little product like the Flip fell short of the revolutionary effect it might have had. Cisco is a networking company and a channel company.
For the blink of an eye, it seemed the Flip camcorder would become the next iPod. Almost everybody was buying one. But then, just as quickly as the fun little point-and-shoot video cameras burst into the market, they seemed to disappear.
And so ended another technology fad. Perhaps it had to do with competition – or maybe the issues with the Flip that users complained about on the Web drove enough people to distraction. The power button, for one thing, seemed to have a mind of its own, which isn’t necessarily good when you are trying to capture life’s little precious moments.
Whatever the reason, one thing is clear: The Flip is no iPod. And Cisco is no Apple. While Apple’s consumer success is indisputable, Cisco’s attempt to touch the consumer with a cool little product like the Flip fell short of the revolutionary effect it might have had.
It’s no wonder that Cisco, a company that does more than 80 percent of its business through the channel and is better known for network routers and switches, has decided to kill the Flip, a product for which it paid almost $600 million in 2009 with the acquisition of Pure Technology Inc. With this "Flip off," Cisco is pulling back from the consumer market, opting instead to touch the consumer through the enterprise customers it serves with its vast network of channel partners.
"We are making key, targeted moves as we align operations in support of our network-centric platform strategy," Cisco CEO John Chambers said in a press release.
Interesting. So by killing the Flip, Cisco seems to be acknowledging something that most of us already knew – that it is a networking company. And not just any networking company, mind you. Cisco is the networking company.
Sure there are competitors, but let’s be honest, when you think of networking, you think of Cisco first, not HP or Citrix.
So, then, what the hell was Cisco doing in the consumer market peddling a product that was so clearly outside of its core focus? We’re not talking Telepresence, a network-centric technology with obvious uses in the corporate environment. We’re talking a cheap little camera that was perhaps a step above those disposable cameras sold at convenience stores and pharmacies.
Well, Cisco overreached by getting into a market it either didn’t understand or wasn’t ready for. Multimillion-dollar IT infrastructure projects that require lots of planning are one thing, but hawking $100 devices to the fickle consumer market are quite another. And when you consider the timing of Cisco’s Pure Technology acquisition, you can’t help but conclude the company misread the market.
With a legion of smartphones containing easy-to-use video cameras available to consumers, exactly what was the point of buying a Flip? To have one more thing to bulk up your pockets? The Flip looked cool and was undeniably useful, but it was limited and couldn’t compete with the multitude of multifunction devices in the market.
So now Cisco is refocusing its business. As part of the adjustment, the company is even repositioning its Telepresence product targeted at the home market, called Umi. The company originally planned to sell Umi through retailers such as Best Buy, but now is integrating the product into its enterprise Telepresence portfolio. Presumably Cisco channel partners – not Best Buy – will be selling Umi solutions now.
Fewer technology vendors have a better track record of working with the channel than Cisco. You’d have to search hard to find disgruntled partners. If a solution provider opts for one of Cisco’s competitors when faced with a choice, it usually has to do with price. And that’s where Cisco needs to keep its focus – fighting off lower-cost competitors, not picking fights in the consumer market.
Pedro Pereira is a columnist for Channel Insider and a freelance writer. He can be reached at firstname.lastname@example.org.