( WIRED ) -- Cisco is shutting down a business unit that it bought for over half-a-billion dollars : the Flip camcorder division . That 's a shame , considering how high the Flip was flying a few short years ago . It 's also a waste , considering that Cisco bought Flip from Pure Digital only two years ago for a cool $ 590 million . But Cisco probably had to act fast , because its earnings fell 18 % in the second quarter of 2011 , and CEO John Chambers had to show he was doing something decisive to stanch the flow . It 's not like the Flip was doing that well of late . When was the last time you saw someone actually using one of these low-quality , `` good-enough '' Flips ? Probably about two years ago . Just what murdered those cheap , adorable camcorders ? The obvious culprit is the general-purpose smartphone . When iPhones and Android phones began shipping with decent cameras for shooting stills , the Flip seemed excessive . When phones got HD video recording , the Flip was downright redundant . But the smartphone was n't the sole cause of the Flip 's fate . The Flip would still be around if Cisco had bothered at all to adapt to the market . After all , there are plenty of camera businesses like Canon that are still alive and well . Here are a few reasons why the Flip flopped . Smarter general-purpose devices . Let 's get the obvious reason out of the way first . When Steve Jobs introduced the camera-equipped iPod Nano in 2009 , he made it clear that the Flip budget camcorder was Apple 's primary target . `` We want to get in on this , '' said Jobs regarding the budget-camera industry , while showing a slide of the Flip at the 2009 iPod event . Why buy a cheap camcorder if you could buy an iPod Nano that shot video , too ? In addition to the Nano , Apple had already released the iPhone 3GS , also capable of capturing standard-definition video . Eventually , a slew of Android smartphones also shipped with video-capable cameras , and so did Apple 's iPod Touch . The iPhone 4 and others brought HD video recording to smartphones , eliminating the Flip 's last possible advantage . Suddenly , the notion of carrying around a cheap camcorder in addition to a general-purpose smartphone or iPod seemed impractical -- extra bulk in your pocket . A slew of general-purpose devices made the Flip irrelevant . The shift to real-time social networking . The Flip probably would n't have been murdered so easily if Cisco had caught on to something that 's been trendy for years : real-time social networking . To make that work , the Flip would have required an internet connection . You 'd think that would be an easy addition , considering that Cisco is a networking company . After Apple released the video-equipped iPhone 3GS , Cisco should 've quickly shipped a Wi-Fi -- enabled Flip for customers to immediately shoot and post media on social networking sites such as Flickr and YouTube . Instead , existing Flip camcorders require a wired connection to a PC in order to transfer the files and upload them to a website . That 's old-school , PC-centric social networking . These days , people like to share their media wherever they are , when it 's happening . Because the Flip lacked a wireless connection to the internet , this was another reason to just buy a smartphone . Here 's where the Flip had a chance to survive . Kids love social networking and sharing pics and video , and they ca n't afford smartphone plans . An affordable , cheap camera with an internet connection would 've been pretty compelling . Furthermore , Flip customers did n't particularly have anywhere they belonged to feel special . Cisco could 've bolstered an internet-enabled Flip with a unique social network made just for Flip users . To be fair , evidence shows Cisco was trying to ship a Wi-Fi -- enabled Flip , but it moved too slowly . At this point , smartphones are already too far ahead , with popular social media apps such as Instagram and Ustream making them even cooler . No compelling high-end option . Cisco 's line of `` high-end '' Flip products are yawn-inducing . The high-end Slide HD ( $ 230 ) includes 16 GB of storage , 720p video and 2x video zoom . For the same price , a low-end iPod Touch includes 8 GB of storage , 720p video , an internet connection and access to hundreds of thousands of apps in the App Store . Which would you choose ? If Cisco had focused on optimizing the high end of its Flip camera line , it would 've offered a compelling reason to buy a Flip versus a smartphone or iPod . Imagine a high-end Flip with a Wi-Fi or 3G internet connection , 1080p video , a decent zoom lens , and a touchscreen with apps made just for Flip video and photo . A solid , premium multimedia device would 've enabled Flip to stand out among the `` jack-of-all-trades '' multifunction devices out there . But alas , the Flip is dead . RIP , Flip . Subscribe to WIRED magazine for less than $ 1 an issue and get a FREE GIFT ! Click here ! Copyright 2010 Wired.com .
Flickr bought Flip from iPhone the second quarter of 2011 for a cool $ 590 million . Its earnings fell 18 % in only two years ago . General-purpose smartphones have made cameras and camcorders seem excessive .