News from Eastman Kodak Co. says that it intends to stop manufacturing digital cameras, pocket video cameras and digital picture frames, a sad and poignant end for a company that made photography available to the masses more than a century ago.
Founded by George Eastman in 1880, Kodak became a house hold name all over the world and dominated the mass market for cameras and video cameras for a good part of this century.
However, like anything in life, when you take your eye off the ball as Kodak did in the 1980’s, the inevitable happens. The company was battered by Japanese competition from then and for some unknown reason was unable or some would say unwilling to keep pace with the shift from film to digital technology. As reported in my article of the 27th January –“the irony is that Kodak today still holds digital-imaging patents used in virtually every modern digital camera, smartphone and tablet.”
The company, which filed for bankruptcy protection last month in the US, commented that it will start to phase out the product lines during the first half of this year. Kodaks intention is to instead look for other companies to license its brand for these products.
Let’s look at a bit of recent history which in itself is significant to Kodak’s fortunes to-day. In 1975, using a new type of electronic sensor invented six years earlier at Bell Labs; a Kodak engineer created the first digital camera. It was a tiny prototype capturing black-and-white images at a resolution of 0.1 megapixels.
Then during the 1990s, Kodak spent some $4 billion developing the photo technology that you find inside most of today’s mobile/cellphones and digital devices. However, and this is where the story turns from innovation to annihilation, a reluctance to stop spending more money on film allowed rivals like Canon and Sony to rush past it into the fast-emerging digital arena. For some unknown reason it couldn’t see the writing on the wall. The immensely lucrative analog business Kodak worried about undermining was decimated in a decade by the filmless photography it invented.
Even Today, the standalone digital camera faces immense competition, as smartphone cameras gain the upper hand. Kodak owns patents that cover a number of basic functions in many smartphone cameras and collected a nice $27 million in patent-licensing fees in the first half of 2011. Over the last three years combined its estimated Kodak picked up nearly $1.9 billion from those fees.
Fast forward to to-day and the company sees home photo printers, high-speed commercial inkjet presses, workflow software and packaging as the core of its future business. It has poured hundreds of millions of dollars into new lines of inkjet printers since 1995 and once the digital camera business is phased out, Kodak said its consumer business will focus on printing.
The demise of such a world renowned name should be a lesson to other multinational brands as they struggle for survival in a world, dominated by an ever increasing, fast moving, innovative seeking, consumer driven marketplace. Innovation and customer wants are the cornerstone to success. But to hold the key and never use it is unforgivable.
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