Ding, Dong, the Flip is Dead

Monday May 9, 2011 – Stewart Wolpin

Every once in a while, analysts/forecasters like myself hit the Nostradamus lottery and predict something otherwise unpredictable. Blissfully ignoring all of my forecasting darts that missed not only the board, but the wall it’s hung on, I will take this rare opportunity to boast “I told you so.”

At the end of January I posited in this space that: Given that cheap digital cameras now shoot high-def video, that smart phones shoot high-def video, that beer can camcorder makers are making a wider variety of sub-$250 models, “pocketcam makers are going to have to come up with something/anything radical to continue ruling the camcorder kingdom.”

And then, a few weeks ago Cisco announced it was abandoning much of its consumer business, most prominently Flip, the leading pocketcam brand. (Blue Microphones, which made accessory stereo microphones for the Flip, posted a light-hearted reaction to the bad news.)

To be honest, I wasn’t expecting something this radical this soon. In my DTC forecasts I figured it would take a couple of years for pocketcams to join 8-track tapes and Palm Pilots in the flaming meteor technology firmament.

But the shift away from pocketcams seems to be happening much quicker as every device now seems to include high-def video recording capabilities. For instance, I met with DXG a couple of weeks ago, and the company that at one time made Kodak’s pocketcams showed only one new slab-style camcorder, a 3D model. All its other new models are beer can styled.

Who’s Next?

In the wake of Flip’s success, JVC (Picsio) and Sony (Bloggie) jumped into the pocketcam arena with varying degrees of success. Canon smartly avoided the entire category, concentrating instead of establishing a quality-or-nothing beachhead. Both JVC and Sony could quietly back-out of the pocketcam business and pretend as if it never happened.

Pocketcam’s most vulnerable other practitioner is Kodak, which was beginning to threaten Flip’s category hegemony. The lone U.S. digital camera maker – heck, the company that invented the digital camera – has one of those tiger-by-the-tail decisions: it can’t let go but it can’t hold on for much longer.

Even with Flip gone, there clearly is still a market for pocketcams – their breast-pocket convenience factor for non-smartphone owners is hard to deny. Kodak, considering the hits it has taken in its uncomfortable transition from its reliance on film to digital photography, might be forced into remaining the lone major pocketcam purveyor – which might be a good thing, for a while.

But in a slight adjustment to what I said in late January, Kodak and the rest of the pocketcam makers are going to have to come up with something/anything radical to compete with the growing number of devices that do a lot more than just shoot high-def video.