I doubt it. iPods and iPads don't have them because Apple wants to control how you get media onto the devices. There is no need to do this with a video camera.
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Cisco to stop production of Flip camcorders
- Thread starter Shaun.P
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I doubt it. iPods and iPads don't have them because Apple wants to control how you get media onto the devices. There is no need to do this with a video camera.
this is just my own analysis based on Cisco's and Kodak's annual reports. though honestly, i'm pretty sure Cisco tried to shop Flip around before closing it down... i would if i were CEOnever know if you'd get lucky and find a buyer willing to pay through their nose!
Yeah, the Flip is marginal to Cisco's bottom line which is why they could eat it. But they didn't shop around. Killing it was supposed to be a symbolic gesture to investors that Cisco is getting serious. Personally I don't really get how eating an investment is more symbolic than selling it. I bet Kodak is happy though.
It was stupid for them to buy it for half a billion and not have a long-term plan beyond, this thing uploads video on the web - it looks like it will help increase traffic through our routers so let's own it. Other than that, pocket camcorders have a few years of shelf-life left and I'm pretty sure Kodak is happy now that 30% of the market is suddenly up for grabs.
These camcorders are cheap - way cheaper than a smartphone. They're a bargain for what they do, which is capture HD easily. I can get better video off a $90 zi8 than I can off a $500 iphone 4. I can use a $110 Playsport to capture video under water whereas I won't put my smartphone near water. If I need better video quality than my phone or if I need video for a niche application, I'm not going to buy another smartphone. I'll go with a cheap camcorder. This is the consumer decision that leads to purchasing a flip, zi8, etc and until smartphones fill that void, these devices will continue to make a profit.
in the article you linked to, Kodak never said this product/market was profitable. the guy danced around this fact every way possible, throwing out words like growth, future demand, global, growth, bullish, growth, market share... etc.
You're speaking as an analyst. I'm speaking as a consumer who owns a smartphone but bought a Playsport 2 months ago and knows why he did. If you're looking for me to provide numbers that show the portable camcorder market is profitable, I have no clue where to get them. But if you've crunched numbers that show the market is NOT profitable and I'm wrong, please share.
Probably the only new thing I've read that makes sense to me is that Cisco didn't want to sell because they wanted to hold on the Flip IP.
Besides that, here are some articles that agree with what I've been trying to get at - that these portable camcorders still have significant shelf-life.
Video Killed the Radio Star, but Smartphones Did NOT Kill the Flip Cam
The Tragic Death of the Flip
Smartphones did not kill the Flip
All Things Digital
i'll preface by saying the below are just my opinions, they probably contain a bunch of errors and should be mainly used for educational purposes... if you can even count it as educational
use the following points:
let's see if i can explain it this way. Don Draper, creative director at Sterling Cooper, brings home $500 a month. Uncle Sam and FICA takes $150 so Draper has $350 left. after he pays the mortgage and car note he has $200 left to support his wife, kids, dog and misc household expenses. once all frivolities are done, he has $50 bucks left he puts that into savings. that $50 is more or less the cash flow from his paycheck.
say his wife crashed his car and it caused $250 to fix. his cash flow then becomes -$50. however, is there still a market for his creativity, is he still making money and profit? yes, yes and yes. what i'm trying to say is that just looking at market demand, salary or salary after tax is not a very accurate indicator of whether his job can generate sufficient cash flow.
Revenue
- COGS
= Gross Profit <= Draper's paycheck after Uncle Same
- Operating Expenses
- Depreciation
- Amortization
= Operating Profit or Operating Loss <= also known as Operating Cash Flow and EBIT... Draper's $50/month savings
this is why corporations and Wall Street are intensely focused on cash flow. a company can generate all the revenue they want, but if that doesn't somehow translate into into an operating profit then there's a problem. as i'm trying to show from the example, you don't take Gross Profits to the bank.
note: technically speaking, this example isn't 100% accurate because i've ignored Interest Payments and Taxes (amongst others) to simplify this explanation.
so when reporters and bloggers talk about portable camcorders being "profitable", which level of profit are they referring to? i'm pretty sure they themselves don't know either but i'd venture they mean Gross Profit because Kodak has consistently generated operating losses as a whole. their Consumer Digital Imaging Group (portable camcorders) increased sales by 5% in 2010... but this was only achieved due to a one time, non-recurring IP licensing to Samsung and LG which contributed 25% of the CDIG's revenue. a non-core business product in a one time transaction was the only way CDIG could increase sales is not a good sign by any standard. regardless, that boost in revenue still could not generate operating profit.
it is from this, that i'm drawing my conclusion of how the portable camcorder market currently is not profitable. they might be great if you look at Gross Profits but is that an accurate picture? i'll leave that for you to decide.
i'm not knocking this product by any means. i actually think it's very nifty and has a d*mn good value proposition for companies like Sony, Panasonic, Samsung and LG. the longevity of entry level camcorders is probably tied more to these global firms than market demand.
as for using Flip for their IP? i'm not sure. i would assume the meat of video conferencing tech lies in efficiency of data transfer between clients and less in image capture?
use the following points:
- having market demand for product x
- making money from product x
- making profit from product x
- generating cash flow from product x
let's see if i can explain it this way. Don Draper, creative director at Sterling Cooper, brings home $500 a month. Uncle Sam and FICA takes $150 so Draper has $350 left. after he pays the mortgage and car note he has $200 left to support his wife, kids, dog and misc household expenses. once all frivolities are done, he has $50 bucks left he puts that into savings. that $50 is more or less the cash flow from his paycheck.
- is there a market demand for Draper's creative genius? yes, since he's employed at Sterling Cooper
- is Draper making money from using his creative genius? yes, he makes $500/month
- is Draper making profit? yep, around $350/month
- is he generating cash flow? oui, $50/month
say his wife crashed his car and it caused $250 to fix. his cash flow then becomes -$50. however, is there still a market for his creativity, is he still making money and profit? yes, yes and yes. what i'm trying to say is that just looking at market demand, salary or salary after tax is not a very accurate indicator of whether his job can generate sufficient cash flow.
Revenue
- COGS
= Gross Profit <= Draper's paycheck after Uncle Same
- Operating Expenses
- Depreciation
- Amortization
= Operating Profit or Operating Loss <= also known as Operating Cash Flow and EBIT... Draper's $50/month savings
this is why corporations and Wall Street are intensely focused on cash flow. a company can generate all the revenue they want, but if that doesn't somehow translate into into an operating profit then there's a problem. as i'm trying to show from the example, you don't take Gross Profits to the bank.
note: technically speaking, this example isn't 100% accurate because i've ignored Interest Payments and Taxes (amongst others) to simplify this explanation.
so when reporters and bloggers talk about portable camcorders being "profitable", which level of profit are they referring to? i'm pretty sure they themselves don't know either but i'd venture they mean Gross Profit because Kodak has consistently generated operating losses as a whole. their Consumer Digital Imaging Group (portable camcorders) increased sales by 5% in 2010... but this was only achieved due to a one time, non-recurring IP licensing to Samsung and LG which contributed 25% of the CDIG's revenue. a non-core business product in a one time transaction was the only way CDIG could increase sales is not a good sign by any standard. regardless, that boost in revenue still could not generate operating profit.
it is from this, that i'm drawing my conclusion of how the portable camcorder market currently is not profitable. they might be great if you look at Gross Profits but is that an accurate picture? i'll leave that for you to decide.
i'm not knocking this product by any means. i actually think it's very nifty and has a d*mn good value proposition for companies like Sony, Panasonic, Samsung and LG. the longevity of entry level camcorders is probably tied more to these global firms than market demand.
as for using Flip for their IP? i'm not sure. i would assume the meat of video conferencing tech lies in efficiency of data transfer between clients and less in image capture?