I purchased a FLIP camera a couple of years ago. The Flip is cheap and very easy to use. Shoot video – plug USB into computer – upload video to Vimeo or Youtube or any of the other hosted video sites – share.
Since then I’ve seen them come out with HD models, more memory capacity and additional colors. I see the compact little cameras everywhere; not surprising since they have 35% of the market share for video camera/camcorders. Currently they’re the No. 1 best-selling camcorder on Amazon.
Two years ago, Cisco bought Pure Digital, the company that made the Flip, for $590 million dollars. This week, on April 12th 2011, Cisco announced that it’s shutting down the whole division and laying off 550 people. Cisco killed Flip.
Cisco’s official reason for killing the product has something to do with fears that the smartphone in your pocket will soon replace the specialized little camera. They also say they’re really not a consumer focused company and they want to concentrate on their strengths – like the enterprise market.
Cisco is getting out of the portable personal video recorder business okay, but why not sell it off to Kodak or someone else who’s still in the business? Why throw away a half billion dollar investment?
Something smells fishy. I personally think this has something to do with the software which runs the camera.
To understand why; let’s look at the lesson Cisco learned when it purchased Linksys a few years back. Linksys was retailing a model number WRT54 in their home wireless router series. After Cisco purchased Linksys and their product line, it was revealed that the WRT54 was in fact running the open source Linux operating system. Linux is copyright protected and released under the GNU GPL license which requires that anyone selling a product which uses Linux must provide their source code. Source code is the human-readable language that gets updated and recompiled to create bug-fixes, feature enhancements, etc.. this is not normally provided with proprietary products as it is considered the “Intellectual Property” of the manufacturer’s
Cisco was sued for violating the terms of the GPL license over a five year period. They finally relented and came into full legal compliance by providing access to the source code of the WRT54; a free public download from their website. This release of source code enabled programmers to create their own open source and software freedom extending versions of the original software. Projects like dd-wrt and openwrt were born.
These projects eventually extended the capabilities of the original Linksys router well into the territory of wireless router features that were traditionally far more expensive offerings. Features like the ablility to create client-bridges, utilization of WDS, QOS and optimization features for VOIP and VPN use. Features that folks used to have to pay hundreds and sometimes thousands of dollars for!
To this day, savvy technical people can purchase pre-owed $30 wireless routers from Ebay and turn them into something more special – no additional charge. Why purchase a more expensive Cisco product when you can get similar functionality – cost free.
What lesson did Cisco learn from the WRT54? If they sell a product which uses GPL licensed software or the Linux operating system, they will have to provide source code to the product they sell. Knowing this, it would be ill advised to sell the Flip product line off to another company without disclosing this. It would also be unwise to continue to sell a product in voilation – especially because they got pinched for this once before.
Is it possible Cisco didn’t know when it bought the product from Pure Digial that it was using a video codec or operating system or other component software application that was Linux or GNU GPL software? Maybe they don’t want a repeat of their last misstep selling products using copyrighted software they don’t own? I think it’s possible, especially in light of the way they’re simply “killing” a very popular and profitable product.
They’re not talking about it – maybe because no one has asked. Nevertheless – something smells fishy. 590 million dollars down the drain? Not if they stand to lose far more!
Cisco stopped selling the product – killed it completely – and with it their liability.