Two years after paying $590 million for it, Cisco Systems Inc. isshutting down its Flip video camera unit, part of a major retreatfrom the consumer electronics market.
Cisco, based in San Jose, Calif., will lay off 550 workers in therestructuring. It is unclear whether any of them are in the Bostonarea. The company has more than 2,000 employees in the state, mainlyworking on telecommunications and networking equipment and software.
Cisco has acquired 14 companies in Massachusetts since 1994,including its 2009 purchase of a cellular data-networking company,Starent Networks, for $2.9 billion.
Apart from killing off the Flip, Cisco will re-target its new Umiteleconferencing product as a product for business use, abandoningefforts to sell it to consumers. The company will continue to sellits line of Linksys home networking equipment, but will focus onmarketing it as a service for delivering Internet video to the home.
Cisco expects to take a $300 million charge during the third andfourth quarters of 2011 to cover costs of the restructuring.
The original Flip video cameras fit into a shirt pocket, ran on acouple of AA batteries, and produced high-quality standard-definition videos. Brought to market in 2007 by Pure DigitalTechnologies Inc., the Flip soon became wildly popular, especiallyafter TV personality Oprah Winfrey praised the cameras and handedout free samples to the audience at a taping of her show.
In March 2009, Cisco acquired Pure Digital as part of a push toexpand beyond its traditional business of selling high-endnetworking gear to giant corporations. But the Flip's popularitybegan to wane as consumers embraced smartphones like the Apple Inc.iPhone and phones using Google Inc.'s Android software. Generally,such phones contain high-definition video cameras, eliminating theneed to purchase a separate device.
Hiawatha Bray can be reached at bray@globe.com.
13flip.ART
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