Cisco gets rid of the Flip camcorder
Consumer products have been a drag on Cisco's results because they carry profit margins that are far lower than the big-ticket capital equipment the company sells to corporations and governments, analyst Simon Leopold said. But the drag
has been minor, because consumer products are still only a small part of Cisco's overall business
Last year, the Flip Video was still the top-selling video camera in the U.S., with 26 percent of the market, according to IDC analyst Chris Chute. But that only amounted to 2.5 million units sold. Dedicated video cameras are small potatoes compared to digital still cameras and smart phones, both of which now shoot video.
Top competitors in the pocket camcorder field, which could benefit from Flip Video's demise, are Eastman Kodak Co. and Samsung Electronics Co. Rubin expects Kodak to pick up much of Cisco's market share.
Leopold said the performance of Cisco's corporate products has been a bigger factor for investors than the consumer business. He believes the selling is overdone because its market share losses are mainly in fringe products rather than bread-and-butter routers and switches.