Cisco to close Flip business

In quite a shocking announcement this morning from Cisco, the company has said that as part of a new plan to align its operations, it will "exit aspects of its consumer businesses”.

Cisco says it will realign the remaining consumer business to support four of its five key company priorities -- core routing, switching and services; collaboration; architectures; and video.

It was only last week that Cisco launched new smartphone apps and social software for its Flip fleet of mobile video devices.

"We are making key, targeted moves as we align operations in support of our network-centric platform strategy," said John Chambers, Cisco chairman and CEO. "As we move forward, our consumer efforts will focus on how we help our enterprise and service provider customers optimise and expand their offerings for consumers, and help ensure the network's ability to deliver on those offerings."

The new plan will see Cisco:

• Close down its Flip business and support current FlipShare customers and partners with a transition plan.
• Refocus Cisco's Home Networking business for greater profitability and connection to the company's core networking infrastructure as the network expands into a video platform in the home. These industry-leading products will continue to be available through retail channels.
• Integrate Cisco umi into the company's Business TelePresence product line and operate through an enterprise and service provider go-to-market model, consistent with existing business TelePresence efforts.
• Assess core video technology integration of Cisco's Eos media solutions business or other market opportunities for this business.

The company expects to let go "approximately 550 employees in the fourth quarter of fiscal 2011”.

Update: Cisco Australia has the following statement to add.

"First, I’d like to recognise and thank the reseller partners that have helped us grow the Flip Video business in Australia and New Zealand to the leading market share position in the Shoot and Share video category," said Todd Lynton, Managing Director, Cisco Consumer Products, ANZ.

"While we are exiting the Flip Video business globally, we will continue to support current FlipShare customers and partners with a transition plan.  As we move forward, our commitment to partners remains as strong as ever and we will continue to provide home networking products that connect consumers and change the way they collaborate and enjoy entertainment at home. Products will continue to be available through retail channels and specialist computer resellers nationally.”

There are currently no public details available on the transition plan.