Cisco (CSCO) announcement this morning that it will shut down its Flip video-camera business is relatively immaterial from a growth and margin perspective, according to a note by Citigroup Global Markets.

The firm estimates Flip contributed about $325 million in fiscal 2010 revenue and was on about a $400 million run-rate in fiscal 2011.

“Our modeling suggests exiting the business has a five-basis-point impact on topline growth and 30-to-35 basis point positive impact on operating margins in fiscal 2012,” wrote Citi analyst John Slack.

The Flip exit allows the company to cut about 550 jobs as part of its broader restructuring plan for its consumer businesses. As a whole, the consumer division represents only about 2% of revenue for Cisco.

The real issue for Cisco lies with the competitive and margin pressures it’s facing in its core routing and switching business, problems that will take years to fix, Slack wrote.

Still, Slack sees the Flip exit as a positive for Cisco.

“We have long questioned the strategic rationale of Cisco’s acquisition of Flip,” Slack wrote. “In our view, Cisco as an organization doesn’t have the DNA to support the rapid design cycles and fickle nature of the consumer business.”

Shares of Cisco are down 0.5% at $17.38 in midday trading.

Article courtesy of Tech Trader Daily

Piper Jaffray’s Gus Richard writes today that a tectonic shift has been seen in technology this week at the consumer electronics show: Microsoft (MSFT) agreed to bring its next version of Windows to the ARM chip platform of ARM Holdings (ARMH), and Qualcomm (QCOM) said it would buy Atheros (ATHR), [...]

Article courtesy of BARRONS.com: Tech Trader Daily

Trooval, a company that develops software for timeshare operators, has raised $1.6 million in equity, according to a filing with the SEC. North Bridge Venture Partners participated in the round.

Based in San Francisco, Trooval’s software helps companies predict a visitor’s buying potential in real-time. The only information required for analysis is the consumer’s name and contact information. The company also offers an online marketing platform to the timeshare industry.

Companies: north bridge venture partners, Trooval

Article courtesy of VentureBeat » deals

Intel (INTC) CEO Paul Otellini told investors on a post-earnings conference call this afternoon that the company continues to see 18% PC unit growth in 2010, with another year of double-digit growth in 2011.
Otellini noted that the company has been seeing some softness in the consumer segment in both the [...]

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Samsung is considering equipping its televisions with Google’s (GOOG) Android software as the consumer electronics industry steps up its push into Internet-connected TVs. The comment, reported by Bloomberg, came from Yoon Boo Keun, who runs the Korean company’s TV business.
The Samsung exec also said the company is likely to meet [...]

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iRobot (IRBT), which makes the Roomba vaccum cleaner robot and other robots for both the consumer and military markets, posted better-than-expected Q2 results, triggering a rally in the stock after hours.
For the quarter, the company posted revenue of $98 million and profits of 20 cents a share; the Street had [...]

Article courtesy of BARRONS.com: Tech Trader Daily