Why the Flip camera failed

The Flip was never my favorite pocket camcorder. That's partly because it was the darling of everyone else and also because I found more powerful options elsewhere, like the Kodak Zi6 (and then Zi8). Both offer HD video capture, a microphone-in jack and removable media. Flip didn't offer any of that; the Flip team always told me that those features would likely confuse consumers who just wanted to capture video.

Now I realize they were right. In fact more right than any of us had imagined.

A day after Cisco unceremoniously dumped its $590 million purchase in favor of a pure business strategy, Flip owners and even the Flip CEO are busy licking their wounds and wondering exactly what happened. I'll tell you what happened: A device came along that made video capture and sharing even easier than the Flip—end of story.

Flip's demise has to be one of the most spectacular flameouts in recent tech history. When I met with Flip last year (just prior to the launch of the ill-fated Flip SlideHD), Flip had marketshare numbers that looked not only unbeatable, but unstoppable. According to Cisco executives:

• Flip sales grew by 300 percent between 2008 and 2009.
• Flip led the category throughout the 2009 holiday buying season.
• Flip sold more units than Sony, Canon, Kodak, and JVC combined.
• Flip cameras were number nine out of Amazon's top 10 selling products.
• The "Shoot and Share market" grew over 35 percent in 2009 and and Flip's share of that? A whopping 93 percent.
• On CNN's popular iReport user-generated news section, 70 percent of the user-gen video was shot with a Flip.

This was the success story to beat all success stories. And while I complained even then that Cisco wasn't innovating enough with the Flip brand—I wanted a microphone jack and was begging for them to be the first to offer optical zoom—I could not argue with its success.

Yet, as we sat in that room talking about the Flip Slide HD's unusual design (two screens, one for viewing) and HD capabilities, a storm was brewing outside. Not an actual storm, but an ominous storm cloud of HD-capable smartphones cresting on the horizon. It started slowly in 2009 with the Samsung Instinct HD, the first HD-video 720p-capable cell phone in the U.S. market. By 2010, that one phone was followed quickly by half-a-dozen others. Soon, every phone we saw had at least 720p video capabilities. The most notable entrants were the Motorola Droid and the Apple iPhone 4. I spent a lot of time with the latter device and was soon putting aside the Kodak Zi8 to shoot almost exclusively with Apple's latest smartphone.

These smartphones could all shoot video of equal or even better quality than most Flip models. The Kodak Zi8 can shoot at 1080p, but that resolution is somewhat impractical for editing and sharing. Most consumers watching the video on their computer, or just on the smartphone itself would never notice the difference between 720 and 1080 anyway.

Smartphones and the Flip shared similar lens sizes, so despite the Flip being a single-purpose device, it wasn't actually performing that single task any better than competing smartphones. Worse yet, most smartphone screens were far bigger and offered greater resolution than anything found on the Flip devices.

Obviously smartphones like the iPhone 4, the Droid (and dozens of other Android phones) and the soon-to-follow Windows Phone 7 devices all do much more than just capture and play back HD video. No one ever expected the Flip to add a phone, texting capabilities, or rich social media. So maybe we can excuse the Flip for getting beaten by an unforeseen enemy.

But we can't.

You see, Flip execs were constantly telling me to open my eyes and understand that the lack of features on a Flip was a plus. Most of what I wanted got in the way of simple video capture and sharing. They were right and Flip was easier than anything out there when it came to capturing and sharing video—until 2010, that is.

If you've ever used a Flip—and a lot of you did and still do—then you know that sharing video is as simple as plugging the device into your computer and then letting the software do its work to post the video on the FlipShare Web site or YouTube. Dead simple.

Smartphones like the iPhone 4 smoothed out one last wrinkle, though, and made it possible to share video wirelessly. No need to plug the phone into a computer or pull out the memory card. Just shoot the video, select share, fill in the necessary YouTube fields and you're done. The video is on its way. The iPhone will even compress the video on the fly so it can get to YouTube over a 3G connection. I started sharing short clips this way almost immediately. On my BlackBerry Torch 9800, which only shoots VGA video, I started sharing short clips direct from my phone to TwitVid. In both cases I shot and shared with my phone because it was with me and it was easy to do. Soon I realized that I no longer needed to carry around another video capture device.

In the meantime, Flip rolled out the SlideHD, but, despite having all of Cisco's networking smarts right next door, Flip failed to introduce a pocket camcorder that could share video over Wi-Fi or 3G.

How Cisco and Flip failed to miss this is beyond me. A networking company like Cisco should know better, it has dealt with the "last 25 feet problem" before. Cisco delivers broadband networking, wired and wireless, to millions of America homes via its Cisco and Linksys routers. They know that getting the broadband Internet into the home is fairly easy, but it's often the last 25 feet that are the most critical and difficult for connectivity. In other words, once that broadband is connected to the house, how do you deliver it to every room? Wi-Fi is the obvious answer. Likewise, with video, capturing it is easy for everyone and every product. Getting that video to its destination is the hard part (video's own, virtual last 25 feet). Flip figured it out for one generation of users, but failed to see how the smartphone video-enabled users of 2010 and 2011 would find what was once the world's simplest pocket camcorder oddly limiting.

Many people have asked me why Cisco didn't sell the Flip unit. I wondered the same thing until I realized that Cisco must have tried. Most suitors probably took a look into their own crystal ball and realized that the future for a single-use, disconnected device was cloudy at best.

This article, written by Lance Ulanoff, originally appeared on PCMag.com and is republished on Gear Live with the permission of Ziff Davis, Inc.