This week's announcement that Cisco is shuttering its Flip Video business was but the latest twist in the history of the market share-leading device. The Flip got its start after its creator, Pure Digital, modified its original disposable camcorder to be reusable after hackers showed it could be done. And its success continued to defy convention that the product would resonate against a slew of digital cameras and increasingly competent smartphones that could shoot competitive -- and even high definition -- video.
The Flip also soared above the market share of companies with far stronger brands such as Sony and Kodak, although the latter made gains on a string of hits, including the 1080p-shooting Zi8 and waterproof PlaySport. It even fought back an initial foray from Apple's iPod nano and was still holding its own after the debut of the latest iPod touch, which took the HD video capture feature from the iPhone and made it available without a contract. Yes, the Flip hung tough. That's why its cancellation says volumes about Cisco, the company that acquired it for some $590 million in stock.
Cisco needed to show growth with a consumer product line that could not be easily augmented with acquisitions and that derived little connection with the mother brand -- even less than Linksys, the company's networking line. Cisco certainly tried. But the Flip group made a few false moves that stuck out like a pop-out USB connector, and with little of that spring-loaded joy.
While Flip pioneered and benefited from its differentiated focus on sharing video, its take on two sharing scenarios fell flat. The first was its TV bridge, the $100 FlipShareTV, which tried to cater to those without a home network by including a fat USB transmitter. Unfortunately, that dongle needed to be connected to a PC or Mac, in order to send video to a box that worked only with FlipShare software, making things unnecessarily difficult.
The lesson: if you're going to lock in consumers, it's best to build a prison that people will want to move into anyway.
While none of these miscues sunk Flip, they all demonstrated how the product was stuck betwen a slab and two hard places -- the slab being subsidized smartphones that increasingly could do more with video; the first hard place being the high-end market of camcorders with manual white balance adjustment controls offending the Flip minimalism ideal; and the second hard place being the integration into Cisco's networked world. Had the Flip lived another month, we might have at least seen integrated WiFi, a key step toward progress on that front.
The Flip had a strong run for a longshot device and would all but certainly have years ahead of it in the hands of a more aligned owner. Cisco spent heavily promoting the camcorder during the 2009 and 2010 holiday seasons, asking consumers the question, "Do you flip"? Cisco surely did.
Next week's Switched On will look at the legacy of the Flip, which not only turned the camcorder category upside-down but has had implications for other tech companies as well, from startups to Fortune 500 firms.
Ross Rubin (@rossrubin) is executive director of industry analysis for consumer technology at market research and analysis firm The NPD Group. Views expressed in Switched On are his own.