Professor Elam

Friday Feb 19, 2012

Kodak says it will save $100 M by exiting the point and shoot camera business. The improvements in cell phone cameras are making that a shrinking market. 

The great irony of all this is that Kodak invented the digital camera back in the 1970s. Indeed several of the major DSLR manufacturers like Olympus and Nikon have used Kodak sensors. Kirk Tuck swears by one of the earlier models that is a Nikon body and a Kodak sensor. Kodak's decision to delay introducing digital was spurred by the idea it would hurt the film business. Indeed, but that allowed Sony, Oly, Nikon, Canon to get the foothold in the business. By the time Kodak woke up to reality, the opportunity was lost. 

Kodak really only made cameras as a way for consumers to use their film. And to appeal to the mass audience the camera was never much more than a simple pinhole, just press the shutter affair. Fine for the christmas dinner snapshot but not much else. Admittedly the majority of pictures are taken by women of kids and they are not terribly interested in the technical side as much as they are in their grandchildren. 

But it got me to thinking. Sure Gillette only makes razors to sell their blades. But shaving is a pretty simple act. I wonder if it is not a mistake to be permanently branded as the 'cheapest' product. 

Back in the 1950s and 1960s Kodak Germany produced an SLR, the Retina Reflex. To this day one of the highest quality and most expensive cameras in the world is the Leica. Kodak was not interested in developing the Retina to real pro level status, more money to be made selling instamatics with the drop in film cartridge. 

But in exiting the business, I suspect Kodak branded itself in the same way GM did by installing Chevy engines in Oldsmobiles and Cadilacs. Try as it might, Wal Mart has never been able to move up market and even scare Kohl or Target a bit. And so they remain big, and cheap, atop the Dollar Stores in the line up. 

In the same way that America gave up on electronics to Sansui and Yamaha in the 1970s, it's just one more market gone. 

the latest idea is to sell their patents to stay in the printing business, just as we all attend seminars on the paperless office. 

These guys just don't get it.