Is Kodak Smartly Exiting a Dying Business?

By  |  Thursday, February 9, 2012 at 10:40 am

Kodak Instamatic

I’m part of the problem: I never owned a Kodak digital camera. In fact, I’m not sure if I ever owned a Kodak camera–not counting disposable ones–period.

Still, my instinct upon hearing that Kodak is going to stop making digital cameras (along with video cameras and digital picture frames) was to take the loss personally. Kodak says it wants to license its legendary name to other manufacturers–as Polaroid, Sylvania, and other companies do–but it’s not going to be the same.

Kodak’s decision obviously relates to its recent bankruptcy. It would presumably prefer to be one of the top camera companies and raking in vast profits from the category. But even if the exit stems from financial woes, I’m not so sure that it isn’t, in its own way, a forward-looking move–a sign that Kodak is agile rather than a sign that it’s a failure.

After all, there’s plenty of evidence that camera phones are cutting into the sales and usage of basic, consumer-oriented digital cameras–the very kind that Kodak has focused on for many years. The point-and-shoot business probably isn’t going to grow; it’s going to shrink over time, and the products in it will get more commoditized and less profitable. Maybe it’s better to get out of the market than to continue to be part of the furious race to the bottom.

You can argue that Kodak should have been smart enough to invent the camera phone. You can point out that digital SLRs and other fancier stand-alone cameras–the sort that Kodak chose not to make–are still selling well. Given the situation as it exists, though, I think that Kodak is making the right decision, sad though it may be. And it’s quite possible that other companies that make point-and-shoots may follow its lead over the next few years.

[Art at top of post: Detail from 1965 Kodak ad.]

 
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8 Comments For This Post

  1. @euonymous Says:

    Classic "Innovator's Dilemma" story as per Clayton Christensen. End of the road was visible for years with Kodak, the last buggywhip maker.

  2. @PapaShirbert Says:

    Kodak has been in a downward spiral for at least 20 years. Seriously, what was the last quality product produced by Kodak? Arguably it was their film business (for still photography and movies), but that is pretty near dead. What has Kodak been doing since 1990, anyway?

    It's sad that an iconic name like Kodak is exiting the camera business, but as they haven't made a decent camera in 20 years (digital or otherwise) I don't see it so much as "the right choice" as inevitable.

  3. Andy H. Says:

    Kodak has basically always been a company with expertise in chemistry that focused on film and developing film. With a small sideline in producing consumer-grade cameras.

    Kodak produced some excellent professional quality films into recent times. But when 90% of your business is film, and no one uses film anymore…well, bankruptcy is pretty much inevitable, unfortunately.

  4. JohnFen Says:

    I know I should feel some kind of sadness or loss about this, but I truly don’t. I’m not sure why. Maybe I just figured Kodak was already out of business for all intents and purposes.

  5. gus Says:

    I have one of Kodak’s printers. It is way better than that awful HP inkjet it replaced.

    I expect that whatever products end up with the Kodak brand will be complete garbage just like other well known brands whose current owners sell them to anyone willing to pay.

  6. Samir Shah Says:

    Yes.

  7. E_H Says:

    As expected. They certainly weren't going to continue to manufacture in the US. The business climate is deadly.

  8. Mark 2000 Says:

    Considering Kodak makes the sensor in Leica's you would kind of think they could get a decent design team and shoot out a digital Brownie or something. Retro is in. OM-D, X100, etc. A high end digital Kodak in an old style package would sell like crack in the Loin.