Cisco Systems to close Flip camcorder unit and cut 550 jobs

Cisco Systems Inc. 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.

John Chambers, Cisco's chief executive, last week promised "bold steps" to refocus the company, declaring that missteps were "unacceptable." Analysts then criticized Cisco for depending too much on state and local governments for revenue.

The closing of Flip 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, for $590 million in 2009.

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

Though Cisco will stop producing the Flip, the company will support its FlipShare video-sharing services "with a transition plan," Cisco said, without offering details.

The San Jose company said it was preparing to make further moves to focus on four 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. "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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