The demise of the Flip video camera reads like the opening of a great murder mystery—or at least a decent Law and Order episode. Someone (or in this case, something) has been killed, there are a few suspects, but very few clues.
Or, more accurately, we know who done it: Cisco Systems Inc., the Silicon Valley networking gear giant that set its sights on the consumer video market and forked over $590 million to acquire Pure Digital Inc., the inventor of the Flip, in 2009. What we don't have, and what very few people appear to have even sound theories on, is motive.
Clearly, Cisco wanted out of a consumer business that it never really understood and that offered pitiful margins compared with Cisco's big ticket networking gear. (As evidence, several analysts cite the flop of Cisco's Umi video conferencing devices, which carried a price tag—$600 plus $25 per month for service—that many felt was untenable.) But the company's decision to pull the plug on the Flip business—rather than sell it off—has many people scratching their heads.
The Flip, which first hit the market under that name in 2007, is currently the No. 1 selling camcorder on Amazon.com—the black Flip UltraHD, that is. A total of four Flip models are among the top 10 selling camcorders on Amazon. According to the New York Times, a total of 7 million Flip camcorders have been sold to date and Cisco itself claimed that Flip represented 35 percent of the camcorder market.
"At the end of the day, they were selling quite a few of these things," said Michael Gartenberg, an analyst at market research firm Gartner Inc.
But despite this impressive positioning, it's pretty clear that nobody would have paid Cisco anywhere near $590 million to acquire the Flip business—and here is where our chief suspect, smartphone convergence, comes in. The market for camcorders, especially small, mobile camcorders like the Flip, is on the wane. In fact, according to market research firm IHS iSuppli, overall camcorder shipments have been relatively stagnant since at least 2003—the firm projects that in 2012 about 17.2 million camcorders will ship worldwide, compared to about 17.3 million in 2003.
Analysts have long warned that gadgets that specialize in one thing would be threatened by the convergence of devices that can do several things. Smartphones are the biggest thug, growing enormously in popularity and—in a competition for marketshare among each other—rapidly adding new functionality. The fact of the matter is that nearly everyone who packs a smartphone today—and even more so a year or two from now—is already lugging around a pocket-sized device that shoots video of comparable or better quality than the Flip.
Even so, someone would have paid something for the Flip business, which would have included a market-leading product, a lauded brand and a creative team of designers who shocked the world once and, who knows, could do it again.
Well I'm sure the writer had a good time itemizing what the smart-phone would kill, but this is kind of a silly article.
Looking at your pics, it seems many of you are as old as I am and so remember all the hype about convergence and the "multimedia PC" from the 1980s. It took till between 2000 and 2005 for the PC to be graceful at doing all the things it did in a clunky manner in the 80s. This iPad mania is just a repeat of the multimedia PC discussion.
Regarding cameras ... you need a big lens to collect a lot of light in many applications until you can deal with the noise problem on CCDs. Once you are carrying a nice hunk of glass and maybe a telephoto lens around, it is no longer a compact device like a smart phone. I suppose you could build a lens mount into a smartphone ... but how about you just stick with a camera? Regarding the MP3 player, as some mentioned, it's not a good idea to carry a $600 smartphone to the gym or on a hike when you can carry a smaller and perhaps more rugged $40 MP3 player.
I guess I buy that the smart-phone will put price pressure on the single purpose devices, but a device that does one thing well often wins against a multifunction device with compromises or complexity.
If we accept that there might soon come a single chip (like Apple's A5 ASIC) which embodies processing, telephony, GPS, photography, networking, video and music player capability (for example), it is possible that the volume on that ASIC could be so high that a music player vendor, a camera vendor, and a portable GPS maker could all buy the same chip and throw away most of its functionality (as I understand Apple did with it's iPod touch, really an iPhone), and only attach the bits that are needed for their single application.
So at the ASIC or firmware level I believe in convergence, but the idea that we need to carry the electronic equivalent of a 20-blade swiss-army knife for simpler modern pleasures is distasteful ... and unrealistic.
Reading all the stories about the end of Flip you'd think that this was the only device of it's type and consumers had no other options but nothing could be farther from the truth! I owned a creative Mino HD and loved it until I lost it (glad it wasn't my $500 Droid). Pocket camcorders have their place and will continue to sell but as the quality of smartphone (Uber-Super-smartphones?) comes up, they'll have to compete on more than just decent quality for the price. They'll need to have better optics, better quality, 3-D, etc... at the same or a lower price.
Valid point. I see that one can buy a 16GB iPhone4 without a contract for just upwards of $600.
T-Mobile offers unlimited talk & text plus 2GB of data for $70/month with no contract. Or if you don't plan to use much data, you can get unlimited talk, text and 100MB for $50/month, also with no contract, and get a web "day pass" for $1.49 for 24 hours when you need more data.
I acknowledge that the iPhone4 is still useful in those months when you choose not to pay for wireless service. It can still take pictures and videos and still play music.
But it would probably feel rather strange, I think, to take it out and use it as a camera & MP3 player during those months when you choose not to pay for service and it is unable to function as a phone or web browsing appliance.
With my digital still camera or my MP3 player, it never feels strange to not make a monthly payment to enable full usage of the device :)
Equating (stills camera) mega-pixels with "quality" is pure bunk! Stills are either viewed on screen or are printed on a 4" x 6" photographic paper. The first has about 1.1 mega-pixel at best. The second, at 200 pixels/inch, again, at best, accounts for 0.96 mega-pixels.
So pray tell me someone, what do you do with 16 Mega-pixels other than wasting storage volume???
David Pouge in the NYT probably said it best why the Flip was superior to any smart phone: "The Flip was a great product. Much simpler than a camcorder — the thing pretty much had only one button, Record/Stop — and also much simpler than an app phone....Because it was so quick and simple, you’d wind up catching moments you’d have lost with any other gadget."
As long as you had the Flip in your pocket you could be shooting with seconds.
@martin_#5- great point about the calculator. I think we can all basically agree that convergence isn't going to "kill" any of these products. But it, combined with other factors, are going to make the markets for these products smaller, less lucrative and less sexy over time. But that probably would have happened anyway, one way or the other, right?
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