Growing the top line when you’re a 43 billion dollar company is no small task –probably orders of magnitude more difficult than getting to the first billion! – There are not too many market opportunities that would cause much of a ripple on top of 43 billion dollars. Not surprisingly the execs at CISCO were looking towards mainstream consumer products when they added Pure Digital to its growing list of consumer acquisitions. While the Flip camcorder was initially well received, it hardly justified the close to half a billion dollar price tag and the 550 people required to run the business –especially in light of CISCOs recent poor fortunes; Cisco Reports Second Quarter Earnings.
Chief Executive Chambers, in keeping with his promise, sought ways to bring expenses in line with earnings. At the time he probably hoped this would be achieved through an uptick in revenue rather than having to yield an axe. Unfortunately the latter became necessary, and the Flip phone was “flipped” according to a recent release.
So was it a mistake to exit this business or was it a mistake to enter in the first place? While Cisco is the undisputed ICON of the telecommunication …
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