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.
Like gamers, those who use a camera will not sacrifice function of the lens and aperture combination of the "real thing" for the rubbish you currently get on a Smart Phone and I doubt Smart Phone users will sacrifice the size for a better zoom lens. Even low cost compact ditigal cameras offer such better quality still and video imagery than the best of todays Smart Phones (and at a fraction of the cost).
Why hasn't the Smart Phone killed the calculator? I think there are still some applications that people will want a seperate device for. I still prefer to use the old Casio even when at my PC.
I'm not personaly into video, but can see that it's proponents would still want something like a Flip rather than the shoddy compromise current Smart Phones offer and ease of use; on my last Smart Phone I could never locate the video function in a timely manner so ended up never using it and just gave up and used my still camera in video mode.
I also expect the Tablet will be a passing fad, I've never been attracted to them and all those I know who have them use it for is browsing and it's a very expensive way to surf on a very small screen. Something else I can do on my Smart Phone.
Here are the "devices" I have at my disposal on my smart phone: phone, internet access, PDA, camera, GPS nav, video cam, music/video player, scientific calculator. That's seven devices I would have to carry around (not counting "internet access" and the other apps and utilities I have). I am going to have the first two items (phone, internet) regardless. So for me the argument "but the monthly fees" in favor of dedicated devices doesn't really hold water as I will be paying those fees _anyway_, that doesn't really count as a "cost" of that convergence. I see it as I'm going to have that cost anyway so why wouldn't I want those devices integrated into one device I can put in my pocket rather than needing a "man-purse" to carry all those dedicated devices?
And as for the Flip, when you get right down to it, isn't that just an app that could run on a smartphone? It's not like the Flip has any hardware that isn't found on most smartphones.
I've always been a big fan of GPS nav. However, as with the other convergence devices, I simply don't want to have to carry more stuff. When I'm driving, I usually have my phone CLA powered, using it as a media source (BT) for music, and handsfree - so power isn't so much an issue and it's already set up anyway. And if I know I'm going to have some heavy use without access to power, I have an expanded capacity battery. For other nav purposes, such as walking or basic "where is that restaurant" nav, a smartphone works fine (and how often do you just carry around a PND?). So a smartphone handles 90% of my nav needs for "free" and without additional equipment. What other uses do I have for a PND? Well, biking, but then I have a specifically engineered cyclometer/GPS for that. So really, I have no need nor desire for a separate PND. And consider this - one outing on vacation, 3 of us in a rental car, one had a PND, one had an iPhone, and I had my EVO. Who was doing the nav? Me.
Just used my Flip over the weekend with a tripod. Can't imagine trying to hold a smartphone over more than a minute or two w/o the image starting to bounce all over the place when my arms get tired. Little things like that will ultimately keep many of these single use devices around, though probably not nearly as large a market, as many folks who don't care for quality photo/video (etc) will use their smartphones instead.
Sorry, but I've yet to find a decent SmartPhone that takes as good of a video as the FlipHD. When you factor in the ease of use and editing functions, the FlipHD (and likely others in this segment like Kodak's unit) still beat the SmartPhone. From a consumer prospective at least, Ciso made a mistake with this one.
To Frank Eory: You wrote "Nobody really ever owns their smartphone."
You're using the wrong carrier. In the US, the carriers using GSM technology will sell you by-the-month service with no phone and no contract. I've done this for a dozen years. If I feel like having a new phone I just get an "unlocked" phone and transfer my "SIM" (smart card) to it.
I'm glad the article pointed out one of the often overlooked barriers to smartphones obsoleting the functionality of all these single-function products: the fact that smartphones have a significant perpetual monthly cost.
Even if I thought a smartphone was an acceptable substitute for my digital still camera or my MP3 player -- and I do not -- I am one of those consumers who likes to buy a product rather than rent it, and use it until a better one comes along, or until it breaks. Then I buy, not rent, a newer model.
Nobody really ever owns their smartphone. You get one from your wireless carrier at a heavily subsidized low price, and you commit to paying a hefty monthly bill for 2 years, part of which is $30/month for internet access. If you change your mind or wish to change carriers, you will end up paying full retail for that smartphone...which may not even work on another carrier's network.
Consider just the monthly data cost of $30, just a fraction of your total wireless bill. At $30/month, how many months would it take to save enough to buy a nice HD video camera? A digital still camera that also does HD video? An MP3 player with 120GB of storage? A portable GPS device?
Perhaps it is inevitable that we will all eventually be pushed into getting smartphones and paying higher monthly bills to one wireless carrier or another. But that doesn't mean that all of us will cherish the idea of become renters rather than owners...
Flip video can turn into an app that goes into a smartphone. The convergence that is brought with smartphone has killed some products and will continue to do so.
For PND, personally, I still prefer to have a separate PND device from my smartphone for an obvious reason. I don't really enjoy my navigation being interrupted by an incoming call. In addition, with navigation on during my tour, the battery in the smartphone just can't last. What's your preference?
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