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Cisco Systems to shutter Flip camcorder unit, cut 550 jobs

April 12, 2011 |  7:51 am

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Cisco Systems is flipping the off-switch on the Flip camcorder.

On Tuesday the computer networking giant said it was shutting down its Flip Video unit as a step toward narrowing its business -- a reversal after years of looking to diversify its product offerings.

About a week ago, John Chambers, Cisco's chief executive, promised "bold steps" to refocus the company, declaring that missteps were "unacceptable." Analysts then criticized Cisco for being too dependent on state and local governments for its revenue.

The shuttering of Flip cam operations will mean the loss of about 550 jobs and about $300 million spent across the first half of Cisco's fiscal year, the company said in a statement.

Cisco bought Pure Digital Technologies, the maker of the Flip cam, for $590 million in 2009.

The Flip camera line had been a popular seller among consumers for its easy-to-use controls and its swift ability to get video on the Web as well. Pocket-sized camcorders from Sony, Kodak and Polaroid hit the market over the last couple years, due in part to the Flip's success.

Though Cisco will stop producing the Flip camera, it will still support its FlipShare video-sharing services "with a transition plan," Cisco said, not offering further details.

The San Jose-based company said it was preparing to making further moves to focus on four "key company priorities": core routing, switching and services; collaboration; data center architectures; and video for business customers.

"We are making key, targeted moves as we align operations in support of our network-centric platform strategy," Chambers said in a statement Tuesday. "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."

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-- Nathan Olivarez-Giles

twitter.com/nateog

Photo: A lineup of Flip Mino cameras. Credit: Cisco Systems via Flickr

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