Cisco (News - Alert) Systems Inc. is exiting parts of its consumer businesses, with plans to shut its Flip video camera business, the Associated Press reported today. The company's hasty exit from the direct-to-consumer market will take about 550 jobs, as well. The San Jose, Calif.-based company bought the digital video camera from its maker, Pure Digital Technologies Inc., in March 2009 for almost $600 million.
“We are making key, targeted moves as we align operations in support of our network-centric platform strategy,” said Cisco CEO John Chambers (News - Alert) in a prepared statement. “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.”
The announcement by the world's biggest maker of computer-networking gear on Tuesday comes just a week after CEO John Chambers sent a memo to employees vowing to take “bold steps” to narrow the company's focus. (Which usually means, “Some of you may be seeing pink slips soon .”)
Cisco is currently facing stronger competition from rivals in its core business, so it's not unexpected that the company would realign its remaining consumer business to support four of its five key priorities: core routing, switching and services; collaboration; architectures and video. The company said its new strategy will be to serve most consumers indirectly through its business customers, rather than making products that shoppers buy straight from Cisco.
Cisco is not selling the Flip camera division – the company appears to see no point in doing so. The company's announcement today revealed that Flip will be closed down. The company plans to continue to support the sharing of Flip videos online.