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Pocket Cam Vendors Vie For Flip Spoils

5/02/2011 12:01:00 AM Eastern

NEW YORK – Vendors and retailers continued to assess
the landscape in the volatile pocket video camera
market following Cisco’s surprise announcement on
April 12 to fold its market-leading Flip business unit.

According to industry executives, dealers are understandably
concerned about being caught short of supply
for the popular handheld HD video cameras just as
the weather started warming up and vacations were
being planned.

“The retailers are still trying to gather information
from Cisco, as I understand, about how long inventory
will be available, and what its plan is for channel inventory
and inventory that Cisco had on its books. Generally
speaking, it looks as though there is going to be
inventory in the channel into midsummer,” said Andy
Bubala, Sony’s camcorder business director. “So, a
lot of the discussions we are having with dealers now
is focusing on that point in time rather than on anything
they might need immediately.”

Officially, a Flip spokesperson would say only that
“our account teams are meeting with our channel partners
to discuss the transition plan and selling inventory.”

Additionally, Cisco posted a statement on the Flip
web site saying the company will continue to sell Flip
camcorders while supplies last and will fully support
the products’ 1-year warranties, and handle other support
issues for “a nominal fee” through Dec. 31, 2013.

Similarly, the FlipShare video editing and sharing
software with an online component will be operational
through the Dec. 31, 2013 date, after which the online
component will go away. However, consumers will be
able to use the onboard software to edit and upload
files to their PCs.

Flip’s competitors were champing at the bit to fill the
giant void that the holder of the category’s top olution,
a 120Hz refresh rate and IPTV connectivity market share position is leaving on the table. But while
many retailers are looking for a supplier to step up and
take charge, their ordering positions were being held
in check until the Flip inventory situation is made clear.

Dave Owen, JVC U.S.A. consumer video division
VP whose company markets the diminutive
Picsio pocket video camera line, said “We
will make production modifications as needed
once more information is available.”

For the short-term there is no inventory void
in the market place, he continued, “Flip is supplying
current dealer forecasts, but for how
long is unknown.”

Most of the company’s competitors were
puzzled over how Cisco could so abruptly walk
away from a top-ranked business, and added
that market demand for pocket video cameras
has never been better.

“We do know, looking at current industry data,
the category is not declining,” said JVC’s Owen.
Indeed, according to IDC market research at
the start of the year, the pocket video camcorder
segment was expected to grow 39 percent
from 2010’s 8.536 million units to 11.9 million
units by year’s end.

“There are a lot of people in the market right
now,” said Sony’s Bubala. “Going forward, we
think the key to growing the market falls back
on the manufacturers continuing to make better
products, better customer experiences and
continuing to innovate to deliver better products.”

Thus, the fight is on to see which manufacturer
will assume the new leadership spot.

By default, Kodak appears to be taking an early lead.
Peter Palermo, Kodak’s Worldwide consumer experience
design and marketing director, said, “We’ve been
very aggressive on many fronts, since we launched in
the category in 2008,” bringing features and experiences
to the category that nobody else brings. The
company recently released its second-gen PlaySport
($180 suggested retail) Full HD 1080p go-anywhere
pocket cam as well as a PlayFull ($150 suggested retail)
Full HD, 5 megapixel model.

“Our business grew almost
200 percent last year, so
we’ll continue to stay the course.
I suspect that once Flip has worked through all of its
inventory that we will be the No. 1 brand [for market
share] in the category,” he continued.

But Sony, the former long-time camcorder category
leader, which accelerated its efforts in the pocket video
camera segment last year with the introduction of
its “Bloggie” models, will look to amp up the competition
some more with models that bring new features,
including the first Bloggie 3D ($249 suggested retail),
which has just hit dealer shelves.

“This is a huge opportunity for us and absolutely, our
goal is to be No. 1 in this market,” Sony’s Bubala said.

The company also just started shipping the Bloggie
Duo ($169 suggested retail), which positions LCD
screens on both the front and rear of the camera to
assist with shelf shooting.

Meanwhile, both Samsung and Toshiba recently introduced
all-weather pocket video cameras to go after
the active-lifestyle set.

“Our Camileo camcorders offer capabilities not found
in smartphones, such as being waterproof,
shooting in full 1080p HD
and offering the performance of an
optical zoom lens,” noted Paul Collas,
Toshiba America Information Systems
digital life products and services accessories
marketing director, adding
the camcorder market is faced with
cannibalization from hybrid smartphones…
“Toshiba understands consumers
have different requirements
when it comes to digital video recording
and have thus created a variety of
different models to meet their needs,
including our latest additions—the
Camileo BW10 and S30.”

At the same time, companies are
elevating their marketing campaigns
to win the spoils, including Kodak’s
15 percent off promotion for
PlayTouch, PlaySport and PlayFull
models on Kodak.com through the
month of April.

“We will continue to be very aggressive
in the marketplace, to continue to
increase awareness for the category
and demand for product, particularly
outside the U.S.,” Palermo said, adding
that Kodak already enjoys the No.
1 market share position in pocket
cams in some European countries,
including France.

Sony’s Bubala said his company
“will be increasing its total spend across advertising, promotion,
etc. on an annual basis [he could not disclose by
how much] to use this opportunity to grow our business.
We are talking to dealers about what sort of in-store merchandising
opportunities they may have, such as endcaps,
things like sponsorships and product placements
for our online dealer community, and where it’s appropriate
we are recommending products out of our lineup that
dealers might not have carried but we have a new opportunity
with shelf space opening up to bring in models.”

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