Tuesday, April 12, 2011

Cisco Systems to shutter Flip camcorder unit, cut 550 jobs

On Tuesday the computer networking giant said it was shutting down its Flip Video unit as a step toward narrowing its business -- a reversal after years of looking to diversify its product offerings.

About a week ago, John Chambers, Cisco's chief executive, promised "bold steps" to refocus the company, declaring that missteps were "unacceptable." Analysts then criticized Cisco for being too dependent on state and local governments for its revenue.

The shuttering of Flip cam operations will mean the loss of about 550 jobs and about $300 million spent across the first half of Cisco's fiscal year, the company said in a statement.

Cisco bought Pure Digital Technologies, the maker of the Flip cam, for $590 million in 2009.

The Flip camera line had been a popular seller among consumers for its easy-to-use controls and its swift ability to get video on the Web as well. Pocket-sized camcorders from Sony, Kodak and Polaroid hit the market over the last couple years, due in part to the Flip's success.

Though Cisco will stop producing the Flip camera, it will still support its FlipShare video-sharing services "with a transition plan," Cisco said, not offering further details.


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