I'm both surprised and not surprised that Cisco is shutting down Flip. The designer in me is frankly shocked - that they're willing to throw away the wealth of good brand faith that Flip has earned in such a short time. The strategist in me says, why on earth did Cisco buy Flip in the first place? It's a shame that the great PD that went into the original Flip will die with this company - although the ID work was outsourced, so maybe not so much. Smart Design was responsible for the ground breaking user interface, and for much of the population this technology is still relevant. Yes, smart phones abound, but much of the population can't afford those - the Flip brought simple video capture to those who couldn't afford more expensive products, or who had limited familiarity with computers. It was one of the first video cameras that almost all users could understand how to download.
Why's it going away then? Well, a product line (and a company for that matter) have to be loved to succeed - you have to fight for your brand these days, and have the vision to lead it. Cisco doesn't have that vision for consumer products and frankly they shouldn't have tried to buy it like a commodity. While it makes sense for their bottom line to drop Flip now, it's a waste of brand potential. Overall it's sad that the original Flip owners sold to a bidder worth $40B who would never really have much stake in a $40M company.