Flip out as smartphones move in

The once widely popular hand-sized Flip camcorder has been discontinued by Cisco, which purchased the camera’s manufacturer, Pure Digital, in 2009 for a staggering, MySpace-like sum of $590 million just two years ago.

This paragraph from New York Times article on the Flip camera’s demise is painfully accurate:

At the same time [as smartphones undermined Flip's market], the smartphone has crushed the market for GPS devices, put a serious dent in the point-and-shoot camera industry and threatens the existence of many other everyday devices — the wristwatch, the alarm clock and the portable music player.

The rise of the smartphone has monkeywrenched business plans for many retailers and manufacturers who used to make decent money from MP3 players and GPS devices. I wouldn’t be surprised at all if smartphones take a huge bite out of the thumb drive market within a couple of years. The rapid rise of the smartphone – and now iPad, which has killed off the once-promising netbook market – is a headache for merchandisers trying to cobble together competitive product mixes.

As far as the Flip goes, I was a very early adopter of it but I quickly found it unimpressive. It wasn’t any better than my digital point-and-shoot Fujifilm camera, had an abysmal zoom and its software features were a tad too barebones for my taste. It’s real competitive advantage was its compact size and that obviously made it very vulnerable to competition from smartphones. Flip made the same mistake as Palm did by not transitioning to becoming a phone as quickly as possible. And now it’s too late, although I imagine Cisco will sell the brand name to a low-end electronics company that will slap the Flip name on all sorts of products, including cheap smartphones.

(I really wanted to include a photo of my Flip camera in this post but I can’t find it. It’s packed away somewhere, perhaps next to my Microsoft Velo)