iPod Nano Doesn’t Kill Cisco’s Flip

Many business journalists have a weakness for overheated gladiator rhetoric. By that, I mean they have a predilection for imagining one vendor or product “killing” or “slaughtering” another in the blood-soaked coliseum of the marketplace.

Usually, though, vendors do not kill their competitors, neither literally nor figuratively. In the real world, customers — those individual agents that constitute the demand side of the useful abstraction called the marketplace — decide whether a vendor or its products succeeds or fails. It is the vendor’s task to lead or respond to the customer’s latent or express wishes by delivering products and services that have real or perceived value, or that meet an actual or imagined need.

The truth is, any vendor — even one as confident and accomplished as Apple — can get the consumer market wrong. It’s an easy mistake to make. Consumers aren’t like businesses. They don’t buy products purely on the basis of cost-benefit analyses or relentlessly logical value propositions. They buy products for personal reasons, because they like them and enjoy using them.

At the end of the day, who can accurately and unfailingly foresee what the public will favor all the time? The consuming public is fickle and inscrutable, as the popular, if fleeting, appeal of the Bay City Rollers and the Spice Girls attest.

Some business journalists have concluded that the iPod Nano, equipped with a video camera, foretells the destruction of Cisco’s (Pure Digital’s) Flip video cameras. Steve Jobs called out the Flip camera during his recent iPod product rollout, noting that video uploads to YouTube are booming and indicating that Apple would like to capture some of that growth market.

There’s no question that the multipurpose iPod Nano will be used as a video-capture device, even when it is bought primarily as a media player. Many buyers of the iPod Nano, having obtained video-capture capabilities with the purchase of their Apple device, will not bother buying a pint-sized device, such as the Flip, that is dedicated exclusively to video capture. So, yes, Apple will take some customers and market share from the Flip.

But will Apple kill the Flip? No, not at all. This is a fight that’s just beginning. For now, for customers that want a mobile device that cost-effectively records high-definition video, the Flip and similar single-devices outgun the iPod Nano. The iPod Nano will suffice for those who want a multipurpose device, primarily a music player, that also shoots video — though not HD video.

What will be interesting to observe is the extent to which the market for mobile-video cameras parallels the market for digital cameras. People still buy digital cameras — though they buy fewer of them during an economic downturn — even though cell phones are capable of taking lower-quality digital photographs. At this point, many people still will choose an HD mobile video camera over a multipurpose device that also shoots lower-quality video.

Apple’s video-capable iPod Nano doesn’t kill Cisco’s Flip, but it makes the future of the mobile-video marketplace intriguing to follow.

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