Cisco to shutter Flip camera business

Cisco's consumer business shake-up to cost 550 jobs, $300 million in charges

Cisco plans to shutter its Flip videocam business in a restructuring of its consumer operations following a disappointing string of financial results

Cisco plans to shutter its Flip videocam business as part of  a restructuring of its consumer operations following a disappointing string of financial results.

Cisco CEO John Chambers last week promised bold moves at the company in an internal memo that Cisco publicized. The memo was a call to action for Cisco to narrow its priorities and accelerate decision making following consecutive quarters of disappointing revenue and profits in certain segments of its business, and companywide.

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Cisco's consumer business was off 15% in the company's fiscal second quarter, and Flip sales were half of what Cisco expected.

Consumer chief Jonathan Kaplan, who joined Cisco after the company purchased Flip maker Pure Digital for close to $600 million in 2009, left the company following the Q2 results.

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Cisco will realign its remaining consumer business to support four of its five key priorities - core routing, switching and services; collaboration; architectures and video. Cisco anticipates this realignment to result in the loss of 550 jobs and restructuring charges of no more than $300 million in its fiscal third and fourth quarters.

The realignment also includes the dispersal of Cisco's Eos media and entertainment operating system technology, particularly the video component, to other market opportunities. This apparently prompted the resignation of Daniel Scheinman, senior vice president and general manager, Cisco Media Solutions Group, according to All Things Digital.

Cisco has also merged its umi consumer TelePresence system, which was criticized right out of the chute for its high price, with its business TelePresence operations. In addition, the company will attempt to glean more profits from its Home Networking business – aka, Linksys – while aligning it more tightly to the company's core networking infrastructure business.

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