For fans of Cisco's popular Flip Video camcorder, the decision to cease production was both baffling and unexpected. But it shouldn't be.
The Flip Video's transition from the best-selling consumer-grade camcorder to obsolete technology corresponds with the rise of another massively popular consumer device -- the smartphone.
What devices like the iPhone did not destroy they rendered almost irrelevant. Consider products like the GPS unit, point-and-shoot camera and the alarm clock -- all of which have become subsumed into the feature set of even the most simple smartphone models.
Moreover, in the case of the Flip camera, much of functionality is actually improved on in devices like the iPhone. This is true especially of the smartphone's connectivity, which allows users to quickly upload photos and videos to online video services like YouTube.
Cisco wasn't oblivious to this reality. A patent filed earlier this year confirmed the company was in the midst of developing a WiFi Flip Video that would make uploading video a far simpler process. The move made sense for Cisco, which had built much of its success on communications technology like WiFi access points and routers. But the product never materialized.
Many analysts are not surprised by Cisco's decision to axe the Flip Video. The division was responsible for only about $317 million, less than 1 percent, of Cisco's $40 billion in revenue last year.
But as Cisco chief John Chambers said in a statement, the company's decision to shut down the Flip division was a part of a much larger strategy of steering Cisco back in the direction of the things it knows well. We are making key, targeted moves as we align operations in support of our network-centric platform strategy, he said in a statement. Clearly, this was not an area where Flip Video fit in.