Sources said Cisco had signaled its desire to exit the consumer market and was advised to seek a buyer for the Flip business. It is not known if Cisco engaged in discussions with any other company about a possible sale. A spokesperson for Cisco did not immediately respond to a request for an interview.
"Sometimes it comes down to what the accountants have to say," Gartenberg said. According to Gartenberg, it seems likely that Cisco calculated that it would be easier and ultimately less costly to simply shutter the unit and write it off, rather than going to the time and trouble of finding a buyer and selling Flip at a considerable loss. "Someone at Cisco ran the numbers and decided that this was the way to go," Gartenberg said.
New York Times columnist David Pogue last week theorized that the most plausible reason Cisco choose to kill the Flip business rather than sell it is because Cisco wants to hold onto the Flip technology, presumably to apply to other areas. But it's not clear what about the Flip technology would be applicable to Cisco's other businesses, though the company said in its statement last week that video remains one of its five key company priorities. (Pogue also reported that Cisco was supposed to release a new Flip model last week, FlipLive, capable of live video broadcasting to the Internet).
Jordan Selburn, a consumer electronics analyst at market research firm IHS iSuppli, said that despite Flip's position in the marketplace, the Flip unit may have simply been unprofitable. "Cisco may have simply decided that they don't have consumer DNA," Selburn said.
"Part of the problem with Flip was once you bought one, you never had a reason to buy another one," Gartenberg said, adding that Cisco "lacked an understanding of the marketplace."
"This is a sad thing for the whole industry," said Rick Doherty, co-founder and director at the Envisioneering Group. Doherty said the Flip design team made a serious impact on the consumer electronics world and predicted that its members would resurface and "spread their wings."
"Camcorders are still a good business for many people," Doherty said. "There will be more innovation there, and great things will probably be coming. It's just a shame that Cisco took this route of not heeding industry trends and not, it seems, even respecting the company that they acquired."
So it would seem that we can't make a case against convergence alone in the killing of the Flip. But clearly its fingerprints were among those found at the scene of the crime. According to Selburn, the "dedicated single-tasker"—a gadget with only one application—is under fire in all areas of consumer electronics, thanks in large part to the threat posed by multiple-application devices like the smartphone and media tablet. "That doesn't mean that they are all going away or doing badly," Sulburn said.
Let's take a look at some of the other heretofore popular—even beloved—consumer electronics devices that face threat from this menace at large.