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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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