Jim Chinn said:Every image that is produced via a film camera and traditional materials is one less that should have been made with digital means in the thinking of digital companies.
Jim, I think their concern is more fundamental than that. Before they get to that sophistication level, they need to have attained a secure standing in their chosen industry.
Think about the change they are trying to make. Kodak grew up in a high-markup, recurring demand, process manufacturing environment. The film and paper processing was a cash-cow and their challenge was to keep their brand in front of customers. It was a marketing driven, process manufacturing firm with incredible brand loyalty.
They are now in a consumer electronics industry where the life of an innovative new product is measured in months and where the business requires continual innovation in order to make a single sale. The manufacturing is different, the competition is cutthroat, the margins stink initially and then get worse, consumer loyalty is non-existent and stockholder nervousness is at an all time high.
Browse this article. My guess is Kodak was caught by surprise by this trend.
http://news.softpedia.com/news/Digital-camera-boom-could-be-a-thing-of-the-past-295.shtml
They needed to cut losses far more quickly than anticipated and my guess is they are probably in trouble already.
Kodak is a photochemical R&D and supply company - not an electronics technology company. Their brand name carries little weight, and in fact may be a liability in the consumer electronics industry. In your opinion, who are the top ten consumer electronics/computer technology companies. I'll betcha Kodak isn't on your list. That is the problem Kodak faces.
Stopping production of Black and White paper smacks of a desperation move. They became the #1 digital photography company by cutting prices and profits - not through innovation. They are on the back side of the power curve - having to put more and more energy and money out for less and less profit - just to stay where they are. Shrink the market, miss on a product introduction, rattle stockholder confidence - any one of these will spell disaster. If they do everything right - the will be known as a "me too" market-following has been.
It's sad.