
The Tragic Death of the Flip - jsavimbi
http://pogue.blogs.nytimes.com/2011/04/14/the-tragic-death-of-the-flip/
======
hammock
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!

~~~
tomsaffell
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.

~~~
hammock
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.

~~~
tomsaffell
Yes, but they didnt have to spend $200 on a new device to do it - they just
used the camera built into their $400 laptop

~~~
wot
True, or buy a $15 webcam

------
bpeebles
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.

~~~
tomsaffell
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.

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

~~~
tomsaffell
I didnt work on that project. I was a contractor, so pretty much only saw the
stuff I worked on.

------
angusgr
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...](http://blog.makezine.com/archive/2011/04/rip-flip-camera-hey-cisco-
open-source-the-camera.html)

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

------
AJ007
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.

------
ericd
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.

------
timmaah
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?

~~~
bpeebles
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...](http://www.industryweek.com/articles/cisco_closing_flip_business_24364.aspx?SectionID=2)
for example.

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

~~~
anigbrowl
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.

~~~
kwantam

        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.
    

While this seems logical, it's not true. Many companies have margin targets
that their executives are heavily incentivized to meet.

I've personally seen situations where lucrative (50+% margin) sales
opportunities were given a no-bid because despite being extremely profitable,
it would hurt the executives' bonuses. I've also seen entire product lines
dismantled despite substantial revenue (and profit) contributions because they
were "hurting the company's operating margin."

Executive compensation is a strange and often stupid beast. It's not at all
surprising to me that something like this could happen.

~~~
anigbrowl
Interesting to learn; I had not realized compensation incentives could have
such a distorting effect.

------
mayukh
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.

------
GuoQiangBen
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.

~~~
bediger
Are you a "cam girl"?

~~~
GuoQiangBen
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

~~~
bediger
Then it was worth the demerits! Thanks for having a sense of humor, unlike
those bluenose downvoters.

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

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

------
GFischer
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...](http://fortunaweb.com.ar/cuales-son-los-10-telefonos-celulares-
mas-vendidos-en-2010/)

------
9999
Tragic, but necessary, we all knew where they were heading:

[http://www.youtube.com/watch?v=M6hB9NTYD0E&feature=playe...](http://www.youtube.com/watch?v=M6hB9NTYD0E&feature=player_detailpage#t=186s)

------
pointillistic
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.

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

------
rudee
Yahoo:Delicious = Cisco:Flip ?

~~~
9999
Yahoo:Delicious::Cisco:Flip

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

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

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

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

~~~
crystalis
I'm not trying to argue, I was simply trying to discover how much he thought
popularity matters. If he figured van Gogh was unimportant, it'd be pointless
to try to convince him that sometimes having companies doing interesting
things is worthwhile.

(On another note, is Mac OS 9 valuable now? Will it become more valuable
eventually? Should Apple just have closed shop since they had a small
marketshare and a product that isn't valuable now? Could the lessons learned
from the Newton have possibly been applied to make some other kind of consumer
device?)

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

