Client News
Pure Digital Technologies
USA Today: September 11, 2007
Fun Flip wows camcorder crowd
By Jefferson Graham
Pure Digital Technologies CEO Jonathan Kaplan had this simple idea: Video cameras were too hard to use.
His 6-year-old San Francisco-based company last year introduced a $129 point-and-shoot-style camcorder, initially sold just at Target stores. On Wednesday, as the company plans to unveil the revamped successor to its first video camera, Pure Digital has quietly snagged major market share from rivals Sony, (SNE) Panasonic (MC) and Canon. (CAJ) "We think we're onto something big," Kaplan says. "We see video exploding, just like digital cameras."
Pure Digital's Flip Video is currently the No. 1 best-selling video camera at Amazon (AMZN) and Target.com. (TGT) Kaplan predicts he'll be No. 2 in overall video camera market share to leader Sony by the end of the year. He credits the improved camera and greater distribution, which is doubling next month to 20,000 stores, including the addition of mega-retailer Wal-Mart. (WMT)
Selling for $149 and $179, the new Flip Video Ultra touts improved video resolution, a better microphone and a slot for a tripod. It's available in five colors: orange, red, green, white and black.
Pure Digital has sold 350,000 camcorders. Kaplan predicts sales will top 1 million by early next year. According to market tracker the NPD Group, some 3 million camcorders are sold yearly. Sony dominates, with a 46% market share for the first half of the year. JVC is No. 2 at 14%. Pure Digital is currently No. 7.
Kaplan says it's not just added distribution that will enable him to triple sales in a few months, it's also better exposure in stores. Wal-Mart and Costco have agreed to give Flip much-vaunted merchandising space. "We're going to have a much bigger presence, and that will make a big difference," he says.
Sony has clearly paid attention to Pure Digital's success, says Chris Chute, an analyst for researcher IDC. Sony hopes to crack into the entry-level, ease-of-use crowd via its compact Net Sharing Cam, a $200 camcorder coming this month.
"If the market leader takes you that seriously, clearly Pure Digital has done it right," Chute says.
Sony's Net Sharing Cam has built-in software to upload videos to video-sharing site YouTube, as does the Flip. The Flip comes in two flavors: 30-minute or 60-minute, while Sony recommends a 2-gigabyte Memory Stick for its camera, costing around $40.
Pure Digital's first product was a one-time-use digital still camera that you had drop off at a photo finisher (mostly drugstores) equipped to process the images. Many of those early customers requested a camera they could own -- which led to the development of the Flip.
Convenience trumps quality
Not that the Flip will appeal to your inner Spielberg. It shoots video the same way digital cameras do, using the image sensor to transform pictures into video. The quality is generally described as good, but not as good as a Mini-DV or a DVD camcorder.
Laureen Matta of Centreville, Va., stopped using her big Sony mini-DV camcorder when she discovered the Flip. "I can count on one hand the number of times we used the Sony," she says. "Now I carry this little camera everywhere with me. I shoot all the random things my kids do, and share them easily with family and friends."
Matta concedes that the video quality doesn't stack up to the bigger video camera, but she says she doesn't care. "I've never seen the video on the big TV, but on my laptop, it looks great," she says.
At first glance, the new and old Flip look remarkably similar. Both are made of plastic, but Kaplan says the new version has higher-grade material and a "sleeker, more contemporary feel." One big addition: a bigger and brighter LCD preview screen. On the earlier version, seeing anything on the screen in bright sunlight was virtually impossible. That's changed.
Pure Digital is having an easy time reaching low-end consumers, because most manufacturers don't care for that market; companies like Panasonic emphasize high-definition and better video quality, says NPD analyst Ross Rubin. "Most of them also sell televisions, and they have an interest in building complementary products," he says.
Paul Ryder, vice president of consumer electronics for Amazon, says the Flip struck a chord with Amazon's audience. "Online, the customers tell the story about how easy the camera is to use," he says. "That really helps sell it."
In refreshing the camera, Kaplan says he's most proud that engineers kept it simple. "Most companies have a tendency to throw more and more into the product for new versions," he says. "And then it gets more complicated. I'm proud of our discipline."
While the audio and video is improved, "I wouldn't take it to Africa or a wedding," he says. "But for everyday use, it's great."
By Jefferson Graham USA Today
