The latest rumors, reported in Techcrunch and other places, imply strongly that Cisco is in talks to buy PureDigital, makers of those little flash-based “Flip” mini-cams. I own three of them myself, but that’s because I like to do things like suction cup them to cars, duct tape them to my helmet while sliding down a 45mph luge, ride with them in a human-sized hamster ball, etc.
The interesting thing about this acquisition is that the Flip camera has greatly simplified the ability for the average user to record and capture high definition video for uploading to YouTube and other sites. Lots of people are doing exactly that – and that’s a lot of bandwidth traveling across the Internet.
Cisco’s interest in Pure Digital may seem a mismatch – Cisco is known as a networking company, where the Flip is a consumer gadget. On the other hand, the Flip is a high-bandwidth gadget – and Cisco can stimulate the demand for its networking hardware and software by stimulating the supply of high-bandwidth applications.
Cisco CEO John Chambers has been aggressively pushing into the consumer space, with some enterprise technologies, such as Telepresence, almost tailor made for the consumer market – assuming you can get the economies of scale to work. Cisco also has a digital media network-attached storage device. The key, it seems, is to get more people using the network and more information on the network in order to feed the need for networking devices. Not so much a “razor and blades” model as a “stubble-growth serum and razor” model.
Of course, Cisco has also bought the consumer-router brand Linksys in 2003, and Scientific Atlanta in 2005. Scientific Atlanta deals mostly in set-tops, cable modems, and digital interactive subscriber systems for VideoIP and VoIP.
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