Monday, April 11, 2011

Cisco Drops its Flip Camcorder Business, Cuts 550 Jobs

Cisco will shut down its Flip consumer camcorder business and eliminate 550 jobs in the process. The move will result in restructuring charges to the company's GAAP financial results, with an aggregate pre-tax impact not expected to exceed $300 million during the third and fourth quarters of fiscal 2011. Cisco said it is taking the step to refocus its Home Networking business for greater profitability and connection to the company's core networking infrastructure products.

Additional restructuring steps include:

  • 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 March 2009, Cisco agreed to pay $590 million in stock in exchange for all shares of Pure Digital Technologies, a San Francisco-based company behind the Flip Video consumer camcorder. At the time, Cisco said its strategy behind the acquisition was to build in the media-enabled home and "to capture the consumer market transition to visual networking."

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