Why Steve Jobs fears Flip Video (maybe more than Zune)
Many have assumed that Steve Jobs pretty much handed tiny Flip Video it’s lunch last week when he announced that Apple would provide the same capability in the new iPod Nano for free. Some might mourn the little Flip Video as yet another piece of promising Consumer Electronics Roadkill whose soon-to-be sun-bleached bones will remind us of Zune, Palm, Windows Media Center, and the many anonymous and strangely-colored MP3 and media players now buried in unmarked graves along the Road To Convergence. A closer look reveals a different story, and before we go to that, some congratulations are in order.
CONGRATULATIONS, Little Flip!
You have been mentioned by the biggest name in consumer electronics during the month’s most-watched event. Steve Jobs not only just mentioned you, but 57 minutes into his comeback tour event, he shared the stage with you and acknowledged that you had nailed it! This is big!
Really big. Everyone in sales knows you never mention your competitors unless you absolutely have to. And even if you mention them, you never — and I mean never — give them a complement.
Steve didn’t mention Android, Zune, Microsoft, nor the PC during his presentation. He didn’t mention Palm nor Nokia, either. Just you. Nice job. Steve even gave you some well-deserved props, calling you, “…a very popular one.” And you looked fabulous! Better than Steve, some might say.
Dear reader, if you’re not familiar with the Flip Video, click here for a nice review and iPhone comparison regarding our little celebrity, Flip. A key factoid is that Flip has been a screaming success, selling two million-plus units over the course of two years. And now, Little Flip, you’ve been mentioned by Mr. Bigger. Than. Big.
Celebrate This – You Are in Rare Company.
And after the parties have wound down, your Monday morning arrives with strong black coffee and the realization that Steve also said, “…and we’re going to lower the price from $149 to free.”
So, what now, Little Flip?
And one more time, why did he mention you? Is it because you are now Apple Roadkill like some lame MP3 player?
Or,…could it be because Steve sees you as one of the first really credible threats to The World According to Apple?
Well, not just you, Little Flip, but your bigger, richer, more powerful step-father, Cisco Systems. This year Cisco bought Pure Digital (Flip’s daddy), adding to its rapidly-growing stable of consumer-facing technologies. (disclosure: Cisco Systems has been a client of mine). What you may not be able to do alone, Little Flip, you may very well be able to do now that you’ve become part of the Cisco family.
It might also be that you’re stylish, both physically and in your user interface. You’re also stylish in a way that might actually make Steve worry a bit…the Out-Of-Box experience.
Sweet! How did a young kid like you you learn to do that? Oh, that would be your CEO, Jonathan Kaplan, and his team. And it appears that Jonathan will now be running Cisco’s Consumer Group (largely comprised of the still-dominant Linksys and a few smaller acquisitions).
C’mon, you say. Cisco a threat to Apple? That depends.
Certainly some industry pundits seem to think that Cisco might not be a great competitor in the consumer space.
But my money is on Steve Jobs having realized that Jonathan Kaplan is one of those CEOs who didn’t succumb to the The Apple Effect – the zombie-like response to Apple’s success that has left us poor consumers with so many pretty-but-clueless-and-brain-dead CE devices over the last five years. (Try the new Blackberry Storm or the new Palm, if you need an example. Actually, go into a mobile phone store close your eyes and grab any phone. Open your eyes. My point exactly. Unless you picked up the iPhone, that is.)
Don’t you think that Steve Jobs may have noticed one of the few Silicon Valley CEOs with an eye for style is now running the Consumer Group at a $130 billion dollar firm just down the road? I’m guessing yes, he probably noticed that. He’s good with details, I hear. If Little Flip is up on the Big Screen at the Apple Event, Steve knows who is behind it. He’s gone after the PC, now he is going after Little Flip.
Jonathan Kaplan has put up some Steve Jobs-quality numbers. Granted, Flip has only sold 2 million units or so, about 1% of the 220 million iPods sold to date. Slightly more impressive would be that fact that it sold at a level equal to 10% of the number of iPhones sold. Even more impressive would be that it sold around 15% of the number of iPod Touches! I think that last point may have gotten Steve’s attention.
Pure Digital was the antithesis of Microsoft. No big budgets, no huge marketing organization, no platform synergies (okay, MSFT has rarely been able to exploit these anyway). But Microsoft’s huge multi-hundred-million-dollar investment in Zune has netted it about 3 million units sold – only 50% more than the Flip! (Yes, there is a new one coming out and blah, blah, blah…now go back in your cave.)
And I know what you’re thinking: Microsoft can screw up even the best of products. Yes, true.
But that a startup like Pure Digital can show up and nail it, says something about the startup. And when you combine Pure Digital with Linksys, the ubiquitous home router, and a few other pieces of Cisco’s consumer portfolio that include media storage devices, set-top boxes (they own Scientific Atlanta) and synchronized media players, then you might just start to have something.
And then you can add in WebEx, which is one of the top videoconferencing providers, and a handful of other technologies, and all of a sudden Little Flip is not so little and (mangled metaphor warning!) not really roadkill, but rather, the tip of an iceberg.
Consider this: as easily as Steve Jobs added video to the Nano, Jonathan Kaplan could add music to the Flip. I’m guessing that he could lower the price to free as well. Adding an audio port is easier than adding a camera.
And there’s more for Steve to worry about. The real battle is not about devices, nor about content, but about something much larger: virtualization – putting your content and your life on the web and in the (computing) cloud. It’s easy to forget that the endpoint on the Road to Convergence does not look like an iPhone or a Nano. No, that final stop, if and when we ever reach it, looks like all devices, everywhere, supporting you and me and our life-content.
Did I mention that Cisco powers the Internet?
Welcome back, Mr. Jobs. The game is on.
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