Say goodbye to Cisco’s line of Flip Camcorders. Yesterday, the company announced that they would discontinue the production of their handy, pocket sized camcorders. Their official statement is that they “will exit aspects of its consumer businesses and realign the remaining consumer business to support four of its five key company priorities — core routing, switching and services; collaboration; architectures; and video.”
We’re not surprised to hear this news. In fact we’re a bit astonished it didn’t come sooner in light of the proliferation of smartphones, competitors and media players that sport high resolution camera sensors that can record full HD video in a comparable if not better quality.
According to Engadget, up to 550 employees will be let go.
Looks like Flip got out while the going was good. In Spring 2009 they sold the company to Cisco for an all stock deal that was valued at $590 million.
Cisco Restructures Consumer Business
SAN JOSE, CA–(Marketwire – April 12, 2011) – As part of the company’s comprehensive plan to align its operations, Cisco (NASDAQ: CSCO) today announced that it will exit aspects of its consumer businesses and realign the remaining consumer business to support four of its five key company priorities — core routing, switching and services; collaboration; architectures; and video. As part of its plan, Cisco will:
* Close down its Flip business and support current FlipShare customers and partners with a transition plan.
* Refocus Cisco’s Home Networking business for greater profitability and connection to the company’s core networking infrastructure as the network expands into a video platform in the home. These industry-leading products will continue to be available through retail channels.
* Integrate Cisco umi into the company’s Business TelePresence product line and operate through an enterprise and service provider go-to-market model, consistent with existing business TelePresence efforts.
* Assess core video technology integration of Cisco’s Eos media solutions business or other market opportunities for this business.
“We are making key, targeted moves as we align operations in support of our network-centric platform strategy,” said John Chambers, Cisco chairman and 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.”
In connection with the changes to the consumer business, it is anticipated that Cisco will recognize restructuring charges to its GAAP financial results, with an aggregate pre-tax impact not expected to exceed $300 million during the third and fourth quarters of fiscal 2011. The charges will be disclosed in upcoming earnings conference calls and quarterly Form 10-Q filings. Additionally, the company expects this will result in a reduction of approximately 550 employees in the fourth quarter of fiscal 2011.