Nick Jones

People seem to be doing strange things with video this week. Yesterday Cisco announced they were buying Pure Digital, the makers of Flip - fashionable consumer video cameras. This leaves me totally puzzled. $590 million is loose change for Cisco. But why spend even loose change on a brand no-one has heard of outside the US and which has sold about 2 million units in its entire history. Last year the mobile industry shipped well over 800 million handsets with cameras, the latest models like the Samsung Omnia can already shoot HD video which is on the cusp of mainstream mobile adoption. The chips and camera modules on mid to high-end devices will all head to HD over the next couple of years. So products like Flip are going to be buried under an avalanche of HD enabled handsets. I can understand Flip wanting to sell out before the tsunami arrives but why would Cisco buy?

And my second odd video experience of the week comes from Samsung who announced yesterday they are going to open a mobile movie store called Samsung Movies, starting in the UK and Germany. Why would Samsung want a movie store? Samsung handsets with OLED screens provide a superb video experience but that’s not a sufficient reason to open a store, especially in mature markets like Western Europe where all our surveys show consumer demand for mobile video is low. Added to which all the early adopters who want mobile video probably already own an iPod and know how to rip a DVD. The business model looks odd too, you buy a movie download from the store and get a “free” mobile copy. Worse, the youth demographic who ought to be the prime target for mobile media don’t even understand the concept of paying for music or video.

So yet again I’m puzzled, I don’t see how this helps Samsung’s bottom line. I don’t expect anyone to to rush out and buy a Samsung handset because of a weak movie store. Samsung may feel they have to compete with Apple and Nokia who both have more comprehensive application and media offerings, but creating weak imitations of competitors strategies doesn’t feel like the right approach to me. Samsung may of course have a deeper and more sophisticated plan involving sales of movies for other Samsung consumer electronics equipment, but if so why start with the niche market of mobile movies?