Consumers relate to video of family and friends because of "the experience, and not the technology," Chambers said then. He even pulled out a Flip camera and recorded video of the reporters in the audience. In subsequent appearances, Cisco executives talked about filming video blogs with the devices to keep their employees informed about their whereabouts.

That personal value from video and the way it contributes to network traffic may still be viable, but Cisco, simply put, has not made money with that premise. Analysts noted that there are many Flip competitors on the market, including smartphones such as the iPhone 4 that actually provide live videoconferencing the Flip did not. Even Skype video from a home computer is seen as a viable alternative to a more expensive Umi home telepresence experience, analysts said.

Some have suggested that Umi might be sold to businesses for use by home telecommuters. Cisco's spokeswoman Tillman wouldn't comment on that possibility, but said Umi could be sold by service providers and other partners.

Cisco will still sell its home networking products, which includes the Linksys Wi-Fi router. As for why it's shuttering the Flip business instead of trying sell it off, Cisco offered little insight. Tillman said only that a thorough analysis showed closure to be the best solution.

Whether Cisco should have moved into consumer areas, or simply should have done a better job at it, remains open to debate.