KODAK: DID YOU MAKE THE WRONG MOVE A DOZEN YEARS AGO?

[Aristophanes]

Kodak never had the "Steve Jobs" they needed--a visionary who could transition their strengths and *create* new markets. When Jobs returned to the ailing Apple he moved Apple from a computer company to a technology company. Kodak was in a very tough position, but they could have made a similar transition instead of moving into other established markets.

Fuji did it. They make their own sensors, glass, and cameras, and (occasionally) analog film.

The X100 is the current digital celebrity from a combination of original and retro thinking, sans a Steve Jobs figure. Most companies just require management to match resources to talent; they don't need the Second Coming.

 

[Aristophanes]

Which computer did he invent?

One must "compute" three variables to gain an exposure.

Like all digital data, it went into a box and came out of a box.

 

[steelneck]

This slide collection on slideshare.net about Kodak may be of interst, made by Chris Sandström who is a Researcher and public speaker at the Swedish Royal Institute of Technology.

http://www.slideshare.net/Christiansandstrom/kodak-destruction

His field of research is about disruptive technology and he can actually explain why many companies, in way different areas of technology, repeat the same mistakes over and over again every time disruptive technology enters the picture.

 

[removed account4]

tomalophicon - Back in the 80's or 90's maybe Kodak needed to sell Canon and Nikon their ability to make a better sensor? I believe they invented the amazing sensor tech (plus tons of patents that Apple, et al are all looking to buy), Kodak just couldnt sell it and thus the IBM syndrome (i.e. IBM and the PC of the 80's lost to Dell, etc)

you forgot
dell won because they had prison labor do all their work for them
if kodak just offshored everything, kept nothing in the states
maybe they could have one too ...

i don't know if kodak did anything right or wrong 10=15 years ago
i just know their supply chain has been messed up for a long time
dealers have vague ideas of what is being made, not being made
and their printer ads keep interupting spongbob squarepants.

 

[Athiril]

Which in hindsight was a massive mistake. Sure, there might be prestige in supplying the high end of town, but what of the DSLR boom? For every 1 'bald or Leica digi sensor sold, there is probably thousands of DSLR's sold (figures plucked off the top of my head).

If they had a DSLR that could be sold to suit popular mounts, they needed to market it properly, which in reality, they didn't.

As others have said elsewhere, when was the last time you saw a Kodak commercial running on TV or on billboards and bus shelters. Canon, Nikon, Sony still use these mediums to promote the photographic wares - Heck, even Sigma run TV commercials for their lenses. Kodak doesn't need a management guru, they need a marketing guru.

They had their hand in the dSLR market, it didn't do too well.

 

[hoffy]

They had their hand in the dSLR market, it didn't do too well.

But who knew about it?

 

[Athiril]

But who knew about it?

The market segment it was aimed at. It was, after all, a "full frame" digital SLR several years ago. Not a consumer device. There was no competition at the time on the Nikon side with it's Nikon mount version, and there never was until years after it got discontinued. Only the Canon 1Ds mark I was out when Kodak brought out the Canon and Nikon mount DCS cameras. The 5D Mark I was introduced the same year the entire DCS line was discontinued.

They even brought out a Nikon based dSLR in 1991, it's not from a lack of trying or from overwhelming competition - which there was none at the time.

"Full frame" cameras typically have so far a life-cycle of 3-4 years. The Nikon one was brought out in 2002, then in 2004 they were updated with both a Nikon and Canon version, then discontinued in 2005.

 

[zsas]

you forgot
dell won because they had prison labor do all their work for them
if kodak just offshored everything, kept nothing in the states
maybe they could have one too ...

John I don't agree here, Dell, Cisco, Sun and other PC/server makers won the PC race of the 80's because IBM didn't move fast, they were focused on the mainframe for too long (allegory to Kodak and film) when the server/PC infrastructure was becoming the norm (eg Dell, HP, Acer and Cisco and Sun for the servers) so IBM did not transform fas enough and that is the story of IBM. Recently they sold off all their hardware to Lenovo and became one of the best consulting companies around, they got out and eventually rebounded. There is an amazing case study at Harvard Bus Review re IBM's failings in the 80's and their too-slow-to-respond to the server/PC revolution due to their "mainframe goggles", that I believe Kodak wore too long too but they are "film goggles". Hopefully Kodak can either divest or split out the film arm (ala like what Motorola just did Mobility and Solutions arms) and come out ahead.

The prison item you mention I believe didnt have to do with the manufacturing but the recycling program and in the late 80's when IBM dropped the ball, that program prob didnt exist anyway, my point is that Dell and others ate IBM's lunch on a technology they created/perfected (PCs) just like Kodak (digi sensors) but they relied on the past too long (film)

I believe back in the day when Dell ate IBM's lunch, Dell had all the components made in China and elsewhere but the PCs were assembled in Round Rock TX to order, ala Burger King model (have it your way), although I concede the prison labor did happen it was only with the recycle program but not really relevant here IMHO

 

[Aristophanes]

But who knew about it?

Nikon. The first digital sensor was adapted to a Nikon body.

Kodak was always in the loop, in the driver's seat in fact. They suffered from "next quarter" syndrome while Japanese companies took long term perspectives and management and are still solvent and profitable.

 

[zsas]

Nikon. The first digital sensor was adapted to a Nikon body.

Kodak was always in the loop, in the driver's seat in fact. They suffered from "next quarter" syndrome while Japanese companies took long term perspectives and management and are still solvent and profitable.

Can you elaborate more re this? I dont follow?

 

[alanrockwood]

But who knew about it?

As I recall it was the cover story of one of the photo magazines. The article made a big deal about the camera exceeding high speed film in photo quality. I think I may still have a copy of the magazine.

 

[MDR]

Kodak was not to slow to react to digital photography, they invented the stuff. Kodak suffered because of it's public image as an old behemoth that only produces old style products like Film and Kodak suffered even more when they had a CEO who wanted to completely change Kodak from a Film to an Imaging company even though he knew that the Film division made money and the imaging division didn't. In the Film world Kodak had only really had two opponents with about the same amount of cash as Kodak, Agfa and Fuji in the digital world they have hundred of opponents some of them three times as large Kodak. Kodak is a small fish compared to Sony, Panasonic and even Canon/Mitsubishi. Since the Red, Sony F35, Arri Alexa and the Phantom came on the scene in the motion picture world less and less movies are being made on Film an digital cinema doesn't require release prints so Kodak is losing money in the MP division as well. It's not that Kodak didn't react or didn't try to change but the question is what can they do to becom hip and cool. Apple for instance didn't change at all they always were a Computer Company with some good designs even in the time between Steve Jobs so comparing Apple with Kodak is like comparing Apple and Oranges.

Dominik



Dominik

 

[hpulley]

Right move, wrong execution. They were there with Nikon and Canon at the beginning but neither ended up using KAF sensors. Kodak could have ruled the sensor market, maybe they did for a short time. Just couldn't close the deal with the popular camera makers at the time. Too expensive or why they went elsewhere I don't know. Canon already had CMOS experience for their BASIS AF sensors so going their own way rather than with Kodak's CCDs made sense for them.

For nostalgia reasons I love the old toy and tourist cameras from Kodak, there were plenty; and I like the Instamatic and Pocket Instamatic film formats for fun snapshots but similar to APS they offered little for serious shooters, really just convenience for casual photogs in a hard to manufacture plastic cartridge. The APS panoramic format yielded grainy prints due to the small negative size and it was a joke that the film just recorded that choice, it didn't actually take a different sized negative for the different aspect ratios. APS was an expensive failure; putting that money into film some other way would have been better for the division.

Kodak has always been about branding, Kodak on everything from the front of the camera to the back of the print. There is nothing to brand in digital, no where to stamp Kodak and thus they never made a lasting impression on consumers in the digital space.

 

[Aristophanes]

Can you elaborate more re this? I dont follow?

Dead Link Removed

Item #9.

Kodak sensor--they were the first--in a Nikon body.

 

[removed account4]

John I don't agree here, Dell, Cisco, Sun and other PC/server makers won the PC race of the 80's because IBM didn't move fast, they were focused on the mainframe for too long (allegory to Kodak and film) when the server/PC infrastructure was becoming the norm (eg Dell, HP, Acer and Cisco and Sun for the servers) so IBM did not transform fas enough and that is the story of IBM. Recently they sold off all their hardware to Lenovo and became one of the best consulting companies around, they got out and eventually rebounded. There is an amazing case study at Harvard Bus Review re IBM's failings in the 80's and their too-slow-to-respond to the server/PC revolution due to their "mainframe goggles", that I believe Kodak wore too long too but they are "film goggles". Hopefully Kodak can either divest or split out the film arm (ala like what Motorola just did Mobility and Solutions arms) and come out ahead.

The prison item you mention I believe didnt have to do with the manufacturing but the recycling program and in the late 80's when IBM dropped the ball, that program prob didnt exist anyway, my point is that Dell and others ate IBM's lunch on a technology they created/perfected (PCs) just like Kodak (digi sensors) but they relied on the past too long (film)

I believe back in the day when Dell ate IBM's lunch, Dell had all the components made in China and elsewhere but the PCs were assembled in Round Rock TX to order, ala Burger King model (have it your way), although I concede the prison labor did happen it was only with the recycle program but not really relevant here IMHO

thanks for the backstory zsas ...
i was partly being snarky and partly being ...silly
and partly wishing they had been able to pull it off ...
you know ... make+sell cameras, and film, and printers and sensors
and be the company to contend with as they used to be

its almost 1890 again !

- john

 

[Thomas Bertilsson]

Yeah, time for Kodak to roll up their sleeves, get their fingers dirty, and work themselves back to greatness. Who knows what they can get involved with to reinvent themselves, but I think they need some fresh invention and ideas about how to bring the company forward.

I work for a company where new product introductions relating to energy efficiency is the lifeblood of our future placement in a very competitive marketplace. You have to bring out products to people that are appealing, worth their time in both features and savings, and eventually sell them an idea of getting something better. And then you have to sell a lot of them. How do you make sure that most of your new products are a success? LISTEN TO THE CUSTOMER. ASK THE CUSTOMER.
Works for us since we're still growing but our competition are set back some 16% in the same time period. You have to sell a dream that people believe in.

 

[steelneck]

LISTEN TO THE CUSTOMER. ASK THE CUSTOMER

No, not when talking about disruptive technology. To listen on existing customers in that case is exactly one of the mistakes that those companies that has gone extinct by disruptive technology all have in common.

Hasselbad was also one of the pioneers in digital imaging (early in cooperation with SAAB space division), already at the summer olympics in Los Angeles 1984 threy presented a machine that digitally could transfer images back home to the news office. Very much like mailing pictures today. Hasslblads digital division quickly grew and really made money. And of course they where looking to the possibility of making the camera digital, they where very early. But Hassy was in its soul a mechanical company of shafts, springs and cogwheels. To think that the camera would become electronic was a bit uncomfortale, but they did see it, even anticipated it.

http://www.slideshare.net/Christiansandstrom/hasselblad-electronic-imaging

But even then, right before the digital boom in cameras they closed down the digital division. Why? Simple, they listened on their customers. Back in 1999 the professionals using Hasselblad did not want some expensive silly toy with crappy image quality. Yes, back then digital cameras where crappy toys with a terrible image quality compared to a Hassy.

Hasselblad was very, very close to go bankrupt and close down, very close.

http://www.slideshare.net/Christian...m-the-moon-to-surviving-disruptive-innovation

Another example. The large maker of mechanical calculators Facit, with offices world wide. They did see the threat coming from the electronics, they bought up electronic companies to get competence quickly, they did everything right. They even started to make large mainframe computers in the late sixities and those machines where considered to be of world class. But shortly thereafter when minicalculators actually started to make a dent in the balance sheets (only a dent initially), they took the decision to listen on their big longtime customers.. They did not want tiny minicalculators, those did not even have a paper roll.. And they ceartainly did not need a mainframe computer large as a bus and sucking power like small town. So they put all their effort into new mechanical calculators, those that their old time customers knew. A couple of years after Facit did not exist anymore.

That Cristian has a lot on the subject of Facit too, and as i linked to earlier a 368 page(slides) on Kodak where he make the case that Kodak actually did quite good since it still is around. Most things in this discussion is in those slides by Christian, he is a researcher and lectures about it.

http://www.slideshare.net/Christiansandstrom/kodak-destruction

 

[MDR]

Maybe Kodak should invent a film based datastorage devise for quantum computers sort of rewritable film. Reacts at the speed of light and should someone try to remove the drive without authorization instant data deletion trough lightleak.

Seriously what invention could help Kodak without completely changing the company and what it stands for? Kodak is probably open for any suggestions that could save them.

 

[Thomas Bertilsson]

OK. Let me rephrase: Listen to ALL customers. Existing, and potential. I don't think you heard me.

No, not when talking about disruptive technology. To listen on existing customers in that case is exactly one of the mistakes that those companies that has gone extinct by disruptive technology all have in common.

Hasselbad was also one of the pioneers in digital imaging (early in cooperation with SAAB space division), already at the summer olympics in Los Angeles 1984 threy presented a machine that digitally could transfer images back home to the news office. Very much like mailing pictures today. Hasslblads digital division quickly grew and really made money. And of course they where looking to the possibility of making the camera digital, they where very early. But Hassy was in its soul a mechanical company of shafts, springs and cogwheels. To think that the camera would become electronic was a bit uncomfortale, but they did see it, even anticipated it.

http://www.slideshare.net/Christiansandstrom/hasselblad-electronic-imaging

But even then, right before the digital boom in cameras they closed down the digital division. Why? Simple, they listened on their customers. Back in 1999 the professionals using Hasselblad did not want some expensive silly toy with crappy image quality. Yes, back then digital cameras where crappy toys with a terrible image quality compared to a Hassy.

Hasselblad was very, very close to go bankrupt and close down, very close.

http://www.slideshare.net/Christian...m-the-moon-to-surviving-disruptive-innovation

Another example. The large maker of mechanical calculators Facit, with offices world wide. They did see the threat coming from the electronics, they bought up electronic companies to get competence quickly, they did everything right. They even started to make large mainframe computers in the late sixities and those machines where considered to be of world class. But shortly thereafter when minicalculators actually started to make a dent in the balance sheets (only a dent initially), they took the decision to listen on their big longtime customers.. They did not want tiny minicalculators, those did not even have a paper roll.. And they ceartainly did not need a mainframe computer large as a bus and sucking power like small town. So they put all their effort into new mechanical calculators, those that their old time customers knew. A couple of years after Facit did not exist anymore.

That Cristian has a lot on the subject of Facit too, and as i linked to earlier a 368 page(slides) on Kodak where he make the case that Kodak actually did quite good since it still is around. Most things in this discussion is in those slides by Christian, he is a researcher and lectures about it.

http://www.slideshare.net/Christiansandstrom/kodak-destruction

 

[keithwms]

I have pretty strong opinions about Kodak's management etc., but I will just say this: the position where Kodak finds itself probably has more to do with the complete collapse of the consumer economy post 2008 than film/digital strategy. Very few companies with revenue based directly on American consumerism were (or can ever be) hedged against what happened. I don't know if those of us with a toe in private industry still grasp the full scope of what happened in 2008. It was the beginning of a monumental shift in American spending habits and the beginning of a zero growth, zero inflation, lower credit, blah era that may last for years more.

Sure, if Kodak had forseen that Americans would be defaulting on houses and saving a lot more and bargain hunting instead of living on credit, well then their strategy would certainly have been different. Would they have stayed with film? No, but they could have navigated into the choppy waters of brand new, costly technology somewhat more cautiously. E.g. with more low-end consumer models and less emphasis on high-end products intended to kill medium format... remember that 12 or 13 megapixel DCS thing marketed directly for that purpose? *Huge* gamble.

I think the way Fuji played the last 5 years is as close to perfect as can be, given the very unusual economic circumstances. They have quite healthy film and digital sectors. And they don't seem to have cannibalized each other. In fact they have taken film technology into new places e.g. privacy screens and archiving systems. That is good old-fashioned innovation. And they did that while throwing film lovers a bone here and there and putting out some pretty cool digital toys too.

 

[MaximusM3]

Kodak totally screwed up under most if not all aspects of business. But, the truth is that the their business is one giant dead end street. They were (are) a huge manufacturing company that tried to transition into digital but simply couldn't, and for very easy to figure out reasons. What could they have done to remain as relevant as they were? They certainly could not have stayed the same size and there is no arguing there but, in this digital world, what's going to make them different and relevant? There is simply nothing there. There is no product they can make (a la Apple) that can resurrect them. Sensors? Give me a break...they lost. Printers? Yeah, right. There is no wheel to re-invent in photography. There is NOTHING new and revolutionary that they can come up with to keep going in their current state. Hardware in photography is a dead end, stale as stale gets and innovation stopped 50 years ago for a reason. The best 35mm camera was built in the 1950s by Leica. It's a box with a lens attached. Software? What silly gimmick is anyone at Kodak going to light the world on fire with with when an iPhone can do it with Hypstamatic and the likes? Medium format? Sure, cheap medium format with decent quality may finally breath some life into that segment but then what? Again, when look at the state of digital photography from an hardware (and software) standpoint, there is absolutely nothing new to do. Resolution? Everyone knows that the difference between 20 and 50 megapixels means absolutely nothing, except for file sizes that only a $5000 computer can process and 20TB of hard drive space to store. As we can see, even Nikon/Canon are starting to slow down because unless one can come up with a great camera that can also make a good cup of espresso and maybe even do laundry, everything else is the same old crap. In a crappy economy (as in now) most start re-evaluating wants and certainly needs, so the latest digital piece of junk that does the same exact things as the 10 before it, except more complications, it's just not going to sell. If I was a betting man, I would say that Kodak has absolutely zero future unless they can simply keep the name and still manufacture some film, chemicals, even paper, for the few die hard fans, like Ilford does.

 

[Paul Howell]

I think the problem that Kodak faced, and still faces, is that of scale. Kodak plants and investment was so large, plants could not be downsized only closed. Along the lines of Forta and Agfa. In terms of moving to digital, the issue is that Kodak can not complete with Nikon and Canon for high end and China for low end. I recalling reading that Nikon and Cannon stopped supplying camera bodies to both Kodak and Fuji which ended both line of DSLRs.

 

[segedi]

Didn't Kodak make lots and lots of money from x-ray film? When that went digital I think it had a big impact on their bottom line. And those high-end digital sensors? Made sense to make smaller versions of what I'm sure the US military and CIA funded for their spy satellites. When Kodak lost their vision in the consumer market, this was when their downfall started.

I saw something similar happen when working in Corning, NY between 2000 and 2002. Corning stock was at one point worth about $330 per share, they did a 3 for one split and those shares rose to about $130 per share ($390 for the original stock!) and two years later when the photonics market, the connectors and amplifiers for fiber optic cable, took a dive when cities stopped laying cable - bust. The stock was barely work a dollar. Corning ended up selling the photonics business. But 9 years later, Corning is still around, their stock never recovered to what it was, now trading at ~$13 share.

So I'm hopeful that Kodak can right the ship, stay afloat. Sell off or split the film division into its own entity might help. The film engineers have been doing some very good things. Consolidating the Portra lines and creating Ektar. The later in my opinion is to get out of the E-6 market, but with the lack of availaiblity of E-6 in my market, I'm ok with that. Have to be!

So yes, things are bad for Kodak now. And I'm not in a rush to buy their stock, but I'm hopeful for their continued future.

 

[Thomas Bertilsson]

I should emphasize that I don't think that Kodak can reinvent themselves in the photography business. It's my belief that they have to break new ground and get into other technologies if they wish to survive. That's what I meant by reinventing themselves; sorry if I was unclear.

As Max states above, most everything in photography has been reinvented enough times that nobody cares how many megapixels the sensors are anymore. What else is there? Pictures with scent? Pictures with an attached donut? Nobody needs a camera to do anything else than what's already on them.

If you think about what something like an iPhone has done for photography. Every dumbass that owns one, and that knows nothing about photography, can download applications to their device and just play with the pictures until they have something they like. It's intuitive, easy to do, and you can make an 8x10 print that looks pretty good if you really wanted to. 99% of photographers are probably no more discerning than that.

So what has really changed? Pictures are stored on Flickr, on memory sticks, on hard drives, or Facebook. Fewer prints are being made, and people are NOT stuffing shoeboxes full of them to store in the attic. Making it easy for folks mean they can take decent pictures, that they are happy with, with a device that is also their phone, and they pay nothing for every picture they take other than the power to charge their devices. It's bloody brilliant, if you're selling iPhones. But if you rely on selling point and shoot digital cameras, look out... How do you compete with that? You don't.

So you look elsewhere, check out micro and macro trends in the economy, figure out what future problems are going to be, and start producing solutions to those problems. In my opinion that's what Kodak needs to do.

Yeah, time for Kodak to roll up their sleeves, get their fingers dirty, and work themselves back to greatness. Who knows what they can get involved with to reinvent themselves, but I think they need some fresh invention and ideas about how to bring the company forward.

I work for a company where new product introductions relating to energy efficiency is the lifeblood of our future placement in a very competitive marketplace. You have to bring out products to people that are appealing, worth their time in both features and savings, and eventually sell them an idea of getting something better. And then you have to sell a lot of them. How do you make sure that most of your new products are a success? LISTEN TO THE CUSTOMER. ASK THE CUSTOMER.
Works for us since we're still growing but our competition are set back some 16% in the same time period. You have to sell a dream that people believe in.

 

[MDR]

Thomas I partially agree but Kodak would also have to do a prince; kinda like the company formerly known as. Under their old name they don't stand a chance Kodak = Film in the public and in Wall St. perception and that's what counts. Nokia is pretty much the only company I know off that was able to completly change it's product line and succeed (from paper products and rubber boots to a Telecommunication Giant). I wish Kodak the best of luck and still pray that some knew invention that changes the world comes along and requires the use of classic analogue film.

Dominik