Flip’s Flop – Implications for Cisco and Unified Communications
Flip’s Flop – Implications for Cisco and Unified Communications by Jon Arnold
Cisco’s recent shutdown of Flip has some interesting implications in the consumer space, but I’m not seeing much discussion about what this could mean for UC. I’d like to comment on both tangents here, and if you bear with me, I’ll tie these pieces together at the end.
First, let’s consider the Flip story. The fact that Cisco decided to close out this business entirely tells you how challenging the consumer electronics market is. While Cisco can easily absorb writing off $500+ million in the blink of an eye, that’s still a lot of money for nothing. I have a Flip, and think it’s a great product, especially the way the USB port doubles for downloading to a PC as well as being the charging mechanism. On the other hand, it’s very tough for a single-purpose communications device to survive since the advent of smartphones and tablets. I think it’s fair to say the Flip would have done well if these products didn’t exist.
There are two things here that resonate for me. First, Cisco has been trying hard to establish the company as a consumer brand, but success has largely eluded them. It’s a very difficult bridge for a company with their pedigree to cross, and the Flip decision was simply reinforced by another recent consumer exit – Umi. I saw the demo when Umi was announced, and it’s a pretty cool concept – as well as being a form of UC for the home. However, I think it’s just too far ahead of its time for mass market acceptance, and the Cisco brand simply isn’t strong enough yet to carry Umi along until consumers catch up with the value proposition.
This brings me back to Flip, and the second idea. I’m thinking here about its singular focus. Years ago, when RIM was just taking off, I saw Jim Balsillie speak at a luncheon. One of his strongest messages was that the BlackBerry was succeeding because it did one thing very well – push email. This was before mobile broadband, but consumer-style smartphones were starting to come along. He was adamant that RIM would not dilute their brand promise by adding distractions like cameras – these extras would add cost, complexity, and shift focus away from what the BlackBerry does better than anybody else. I was in total agreement with him. Well, clearly, things have evolved, and that logic would be unthinkable today. It’s getting harder and harder to distinguish between business-only and personal use devices, and the gray space between these choices is getting bigger all the time.
Interestingly, both Kodak and Sony have successful HD video cameras, the Zi6 and Bloggie respectively. These offerings are finding a niche in the fluid and fickle consumer market, so why couldn’t Cisco? Well, it’s the brand, not the product. It would be hard to find stronger brands than these in this particular space, and Cisco’s chance of competing against them here are about as good as Kodak or Sony trying their hand at routers or IP phones.
I’d have to say Cisco understands this and now accepts it, and they’re better off killing it cold than hanging on too long – like Polaroid or Wang – and dying a slow death. This is especially true in an emerging market where the pace of change is brutal, and products fail all the time.
This is inching me closer to the UC angle. Just around the same time Flip was shuttered, Cisco announced they were accepting orders for Cius, their tablet offering which I wrote about here last July. Cius plays very much into the UC equation, and Cisco has a lot riding on it for different reasons than with Flip. This product is squarely in the business camp, and has a clever nod to what’s hot by supporting Android-based applications. More importantly, Cius needs to be ready to counter RIM’s PlayBook, which also has a lot at stake given how Apple is cutting into their market – not to mention defending their territory against the Torch. It’s quite the chess game, and no company can afford to make a wrong move.
With all these devices criss-crossing into new markets, it’s no wonder that buyers are having trouble making decisions. There is little doubt that multi-purpose endpoints are now de rigueur in the business market, so let’s move on from Flip to Cius. Tablets have been slow to gain adoption among business – that’s another article altogether – so there’s no guarantee the Cius will fare any better than Flip. Am sure you’re wondering who gets paid to come up with these strange product names, but the more important question is what they mean for UC.
In my view, there are two implications for anyone either offering or deploying UC solutions. First is the reality that as the lines keep blurring between business and consumer devices, product development cycles will get shorter in the UC space. The UC value proposition is still a work in progress, and until that hardens, we will see failures and exits much like Flip. UC providers need to be agile and focused on constant innovation rather than a fixed product line.
The second implication speaks to all the products I’ve talked about in this article. They share a common thread – mobility – and regardless as to how successful Cius becomes, this is emerging as a core value driver for UC. Whether you look at the consumer or business space, these powerful endpoints are driving broadband demand and adoption of value-added applications. If this is what leads the adoption of UC, so be it.
I’ve been saying for a while now that the locus of communication has shifted from the desk phone to the desktop, and now it’s shifting further out to mobile devices. If you buy into that trend, I think it’s fair to conclude that these devices need to be a big part of a UC offering. On a corporate level, I’d say Cisco has learned to read the tea leaves here. A single purpose device like Flip is not in their DNA, and if that’s not working, it’s time to move on and focus where they can most add value. Cius may or may not be a hit, but they know mobility will drive UC, and somewhere in that equation, end users will need a multi-purpose mobile device.