Cisco announced that they are buying Pure Digital the maker of the low cost Flip video camera. Cisco states that this product fits nicely into their home networking strategy. I am not impressed with this purchase for a number of reasons. First Cisco is an enterprise networking company in their DNA. They have never been very good at consumer marketing and I am afraid the word of mouth marketing that we have seen from Pure Digital will die rapidly under the Cisco umbrella. Cisco paints a beautiful vision of the connected future with rich video being delivered at the drop of a hat across the web but their execution in consumer products falls well short of their vision. The Linksys brand while successful has never been very innovative or exciting and there is no reason to believe that Cisco will suddenly become a consumer products company. In short the value of the Flip will likely be lost in Cisco within two years.
Even assuming that Cisco is able to execute on consumer products one has to ask if the purchase of Pure Digital makes sense. Yes the Flip is popular and easy to operate but cell phone are increasingly incorporating video capture and the resolution of these cameras is increasing rapidly with some models sporting 8 megapixel CCDs and 12 megapixel models are on the horizon. While the video capture will not be at these resolutions these phones will likely be capable of capturing HD video. Additionally most point and shoot digital cameras have video capture capability and these cameras have optical zoom which beats digital zoom any day. As such the Flip will be squeezed from the low end by cell phone video capture which has the added benefit of immediate posting to social networks and at the high end by increasingly affordable digital cameras with video capture. As such the Flip’s days may be numbered. While the purchase may be pocket change for Cisco it is still likely to be wasted money for Cisco.
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