Light Reading
For $590 million in stock, Cisco becomes a video camera company

Cisco's Latest Buy: Flippin' Sweet

Craig Matsumoto
News Analysis
Craig Matsumoto
3/19/2009
50%
50%

Cisco Systems Inc. (Nasdaq: CSCO) dived deeply into consumer electronics today, announcing a deal to buy Pure Digital Technologies Inc., maker of the Flip line of handheld video cameras, for roughly $590 million in stock. (See Cisco to Acquire Pure Digital.)

Cisco has sold consumer products before, such as the home router brand now called Linksys by Cisco. But the Flip is a less geeky kind of consumer product and could lead to Cisco's first direct clash with a mammoth consumer player like Sony Corp. (NYSE: SNE).

Rumors of the deal circulated earlier this month. Cisco had already talked about seriously expanding its consumer business, and a debt offering pumped speculation that an acquisition was in the works. (See Cisco Goes Consumer, Cisco Keeps the Service Provider Faith, and Cisco's Got Cash.)

So, why did Cisco do it? It certainly wasn't for the video quality. As Consumer Reports noted when reviewing the Flip Mino in August, the little cameras lack features like good image stabilization. You can see the results at about the 2:15 mark of this video.

Consumer Reports points out that poor video quality is a "deal breaker... unless you're planning to use it only to create videos to post online – where compression will all but eliminate differences in quality between the best and worst home videos."

That's the part Cisco is counting on. Pure's mission as part of the digital fold would be to help consumers shovel more video -- especially high-definition video -- onto the net, regardless of whether it's any good. That, in turn, could increase service providers' demand for more routers with video-minded features.

The Flip satisfies that account, because it comes with software tailor-made for posting to Internet sites.

The deal is expected to close by the end of July. Pure would be included in Cisco's consumer group, the home of the Linksys by Cisco brand. Pure CEO Jonathan Kaplan would become general manager of the group, reporting to senior vice president Ned Hooper.

— Craig Matsumoto, West Coast Editor, Light Reading

(7)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Stevery
50%
50%
Stevery,
User Rank: Light Beer
12/5/2012 | 4:08:45 PM
re: Cisco's Latest Buy: Flippin' Sweet



Did chambers make a statement about not personally profiting from PureDigitals stock in the acquisition?




How about anybody on the csco M&A team?




Shareholders should be livid about the stupid price and the self-dealing.- It is time for the limiteds in these deals to be exposed.


abashford
50%
50%
abashford,
User Rank: Light Beer
12/5/2012 | 4:08:45 PM
re: Cisco's Latest Buy: Flippin' Sweet



It appears this video camera is the 'iPod' of the video camera world... very simple to use and integrate with the web, and a similar minimalist aesthetic.




So it sounds interesting as a potentially successful stand-alone business, but I really don't see the connection with Cisco as a business.- You bring out the point of 'shoveling more video', but this would happen without Cisco's name behind the unit.




From a networking standpoint, if the device had WiFi or even an Ethernet jack I could see more of a symbiosis with Cisco's 'network as the platform' messaging, but it has a USB port, that is it.- This one just doesn't go clunk for me.




Is there any key video processing IP that they may want to get their hands on?


googol_byte
50%
50%
googol_byte,
User Rank: Light Beer
12/5/2012 | 4:08:43 PM
re: Cisco's Latest Buy: Flippin' Sweet


OK, they have over $30B in cash, so why use stock for a $500M acquisition.

-

I actually read an anlalyst comment that said they were "conserving cash for other deals". -What deal is Cisco going to do that requires $30B in cash?-

sigint
50%
50%
sigint,
User Rank: Light Beer
12/5/2012 | 4:08:41 PM
re: Cisco's Latest Buy: Flippin' Sweet



"From a networking standpoint, if the device had
WiFi or even an Ethernet jack I could see more of a symbiosis with
Cisco's 'network as the platform' messaging, but it has a USB port,
that is it.- This one just doesn't go clunk for me."





_________________________________________________________________________________




 




Pure speculation, but I'm guessing that since Cisco saw some success with Telepresence, they are pursuing video seriously. Application typically uses fixed cameras, so no image stabilisation necessary. Maybe a 'telepresence lite' for homes and value markets.-




Again, to emphasise, pure speculation on my part.




PS: Adding an ethernet port/wifi should be a trivial fix.-


Pete Baldwin
50%
50%
Pete Baldwin,
User Rank: Light Beer
12/5/2012 | 4:08:40 PM
re: Cisco's Latest Buy: Flippin' Sweet



Theory #2: Cisco sees a future of networked consumer electronics and wants to beat Sony to that place, essentially becoming the new Sony (or Apple) of the 2010s.




This one probably has several sleep-deprived holes in it, but I'll toss it up there for discussion anyway.-


Pete Baldwin
50%
50%
Pete Baldwin,
User Rank: Light Beer
12/5/2012 | 4:08:40 PM
re: Cisco's Latest Buy: Flippin' Sweet
I like sigint's theory about telepresence.- And I agree Cisco pretty much has to add Ethernet or Wifi to the cameras -- here's a blog that thinks the wifi part would be a good idea: http://bit.ly/swj8



Even so, as abashford points out, uploading video to the web is going to be popular pretty much no matter what, and it's going to go in an HD direction all by itself.- This isn't like Intel & Wimax, where Intel had to back a standard and force feed it to the industry.




Cisco must have some grand vision for these cameras' evolution, one that Sony can't or won't follow.- (Because if it was obvious enough for Sony to do it, Cisco wouldn't go through this trouble, right?)


vlui13280
50%
50%
vlui13280,
User Rank: Light Beer
12/5/2012 | 4:08:39 PM
re: Cisco's Latest Buy: Flippin' Sweet



If you put the networking stuff aside, does the Scientific Atlanta STB not have a USB port??




ANd for Cisco to keep growing this rate for the next 5 yrs, where do they stand on wireless backhaul and LTE?


Educational Resources
sponsor supplied content
Educational Resources Archive
Flash Poll
LRTV Custom TV
Distributed NFV-Based Business Services by RAD

7|18|14   |   5:38   |   (0) comments


With the ETSI-approved Distributed NFV PoC running in the background, RAD's CEO, Dror Bin, talks about why D-NFV makes compelling sense for service providers, and about the dollars and cents RAD is putting behind D-NFV.
LRTV Custom TV
MRV Accelerating Packet Optical Convergence

7|15|14   |   6:06   |   (0) comments


Giving you network insight to make your network smarter.
LRTV Custom TV
NFV-Enabled Ethernet for Generating New Revenues

7|15|14   |   5:49   |   (0) comments


Cyan's Planet Orchestrate allows service providers and their end-customers to activate software-based capabilities such as firewalls and encryption on top of existing Ethernet services in just minutes.
LRTV Custom TV
Symkloud NVF-Ready Video Transcoding, Big Data

7|9|14   |   3:41   |   (0) comments


Kontron and ISV partner Vantrix demonstrate high-performance video transcoding and data analytic solutions on same 2U standard platform that is ready for SDN and NFV deployments made by mobile, cable and cloud operators.
LRTV Huawei Video Resource Center
The Evolving Role of Hybrid Video for Competitive Success

7|4|14   |   4:09   |   (0) comments


At Huawei's Global Analysts Summit in Shenzhen, China, Steven C. Hawley from TV Strategies speaks to us about the evolving role of hybrid video for competitive success.
LRTV Huawei Video Resource Center
How CSPs Leverage Big Data in the Digital Economy

7|4|14   |   4:48   |   (2) comments


Justin van der Lande from Analysys Mason shares with us his views on how telecom operators can leverage customer asset monetization with big data. His discusses the current status of big data applications and the challenges and opportunities for telecom operators in the digital economy era.
LRTV Huawei Video Resource Center
Accelerator for Digital Business Future Oriented BSS

7|4|14   |   3:08   |   (0) comments


Mobile and internet are becoming intertwined; IT and CT are integrating; and leading CSPs have begun to transform to information service and entertainment providers. How should the BSS system evolve to enable this transformation? Karl Whitelock, an analyst at Frost & Sullivan, shares his views.
LRTV Huawei Video Resource Center
Orange Tunisia Discusses Multi-Band Antenna With EasyRET Solution

7|4|14   |   2:45   |   (0) comments


As new site acquisition becomes more difficult, Orange Tunisia has requested multi-band antenna to support UMTS and LTE innovation. Some things considered include reducing the cost of antenna maintenance and having high reliability antenna and EasyRET solution.
LRTV Huawei Video Resource Center
How Telefonica Spain Considers Antenna Selection for LTE Network Deployment

7|4|14   |   2:19   |   (0) comments


Tony Conlan, Global CTO of RAN, Telefonica, shares his opinion on antennas in LTE network deployment: Tower space is the premier requirement on antennas; reliability is important to reduce OPEX; and EasyRET solution will be helpful for antenna maintenance.
LRTV Huawei Video Resource Center
dtac Thailand: Multi-band Antenna & Capacity Solution for a Better MBB Experience

7|3|14   |   3:45   |   (0) comments


With the development of LTE, tower space and load are limited for new antenna, but users' capacity requirements are growing fast. To provide a better MBB experience, Panya Vechbanyongratana from dtac Thailand shared his experiences and antenna requirements.
LRTV Documentaries
BTE Panel: Network of the Future

7|2|14   |   1:00:57   |   (0) comments


Full-length video of the ATIS Panel Discussion: 'How Far Away Is the Network of the Future & What Does It Look Like?' from the Big Telecom Event (BTE) in Chicago.
LRTV Custom TV
Redknee Supports BH Telecom With Redknee Unified

7|2|14   |   6.14   |   (0) comments


Lucas Skoczkowski, CEO of Redknee, and Amir Orucevic, Director BH Mobile, discuss how the benefits of the Redknee Unified suite of products provide BH Telecom with innovation and leadership in the market, with the flexibility to launch services faster to the market, provide new and compelling promotions and pricing models, and combine services in order to drive ...
Upcoming Live Events!!
September 16, 2014, Santa Clara, CA
September 16, 2014, Santa Clara, CA
October 29, 2014, New York City
November 11, 2014, Atlanta, GA
December 9-10, 2014, Reykjavik, Iceland
Infographics
Allot's latest MobileTrends Charging Report shows that value-based pricing plans are up from 35% in 2011 to 85% in 2014.
Hot Topics
Microsoft to Axe 12,500 Ex-Nokia Employees
Sarah Reedy, Senior Editor, 7/17/2014
GM: 10 Car Models on Road With AT&T's LTE
Dan Jones, Mobile Editor, 7/18/2014
Have IBM & Apple Partnered Their Way to Cloud Leadership?
Mitch Wagner, West Coast Bureau Chief, Light Reading, 7/18/2014
The Municipal Menace?
Jason Meyers, Senior Editor, Utility Communications/IoT, 7/22/2014
FiOS: Slower Sub Growth, Faster Upload Speeds
Alan Breznick, Cable/Video Practice Leader, 7/22/2014
Like Us on Facebook
Twitter Feed