NEW YORK - Cisco Systems Inc., the world's largest maker of computer-networking gear, said Tuesday that it's killing its Flip camcorder business as it moves away from the consumer-products market.
The about-face comes after several quarters of disappointing results. Analysts say Cisco has been trying to do too many different things.
The San Jose-based company said it expects its consumer-business shake-up will result in the loss of 550 jobs, or less than 1 percent of its workforce of about 73,000.
It also expects to take restructuring charges of no more than $300 million spread out over the current quarter, which ends April 25, and the following one.
Cisco bought Pure Digital Technologies Inc., maker of the Flip camcorder, for $590 million in 2009, just two years after the San Francisco-based company made its first camera. It quickly became a top seller because of its ease of use.
A signature feature was a USB connector that flipped out of the case, letting the user connect the camera directly to a computer. The camera even contained video-editing software that fired up on the computer.
Cisco appears to see no point in selling the business - Tuesday's announcement said Flip will be closed down.
Cisco will continue to support the sharing of Flip videos online.
The company said it will realign its remaining consumer business to support four of its five priorities - routers and switches, corporate communications, collaboration equipment, servers for data centers, and video.
Cisco shares closed down 3 cents, or 0.02 percent, to $17.44 on Tuesday.
Associated Press Apr. 13, 2011 12:00 AM
Cisco plans to shut Flip business
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