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.

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