Kodak Will Phase Out Camera Business to Focus on More Profitable Consumer...

Kodak Will Phase Out Camera Business to Focus on More Profitable Consumer Printing

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Rochester, NY—Less than a month after filing for bankruptcy, Kodak announced it will phase out its capture devices business—that is digital cameras, pocket video cameras and digital picture frames—in the first half of 2012. The move is a result of the company’s “ongoing strategic review process and commitment to drive sustainable profitability through its most valuable business lines.” Kodak, which was slow in embracing emerging imaging technologies, is probably the biggest casualty of the digital era, which ironically it ushered in with the invention of the digital camera in 1975.

The nearly 125-year-old camera company is looking to expand its current brand-licensing program and is seeking licensees for its EasyShare cameras, with a company spokesperson stating, “As far as licensing, several companies have expressed significant interest.” Kodak’s Consumer Business will now focus on more profitable growth opportunities in online and retail-based photo printing, as well as consumer desktop inkjet printing.

Kodak has contacted its retail partners and is working closely with them to ensure an orderly transition. It will continue to honor all related product warranties and provide technical support and service for its cameras, pocket video cameras and digital picture frames.

“For some time, Kodak’s strategy has been to improve margins in the capture device business by narrowing our participation in terms of product portfolio, geographies and retail outlets. Today’s announcement is the logical extension of that process, given our analysis of the industry trends,” said Pradeep Jotwani, president, Consumer Businesses, and Kodak’s chief marketing officer.

Despite its exit as a camera maker, Kodak intends to continue a strong presence in the personal imaging market, stating: “While photos are increasingly taken on multifunction mobile devices, Kodak technology makes it easy for consumers to produce a broad range of photo products, anywhere, anytime—from prints to photo books, photo greeting cards and personalized calendars. These items can be made on Kodak products, with Kodak quality at retail, at home and ordered for delivery to home.”

Moving forward, Kodak’s consumer products and services will include:

• Retail photo kiosks and dry lab systems. Kodak pioneered the retail-based kiosk market and now more than 100,000 kiosks and order stations for dry labs around the world, with some 30,000 of those units connected to photo-sharing sites.

• Consumer inkjet printers, which the company says “provide consumers with high-quality output and the lowest total ink replacement cost.” Consumers can send documents and photos to Kodak printers from anywhere using web-connected device.

• Kodak apps for Facebook, which enable consumers to create photo products using photos from their Facebook albums.

• Kodak Gallery (kodakgallery.com), an online digital photo products service. Kodak Gallery permits consumers to share their photos and offers product and creation tools to enable people to do more with them.

• The Kodak camera accessories and batteries businesses. These products are universally compatible with all camera brands and extend into other consumer product segments, such as charging units for smartphones.

• The traditional film capture and photographic paper business, which continues to provide products and solutions to consumers, photographers, retailers, photofinishers and professional labs.

Upon completion of the camera business phaseout, Kodak expects to achieve annual operating savings of more than $100 million, and to incur a charge related to separation benefits of $30 million resulting from the exit of the business.

In addition to its Consumer Businesses segment, Kodak has a Commercial Businesses segment that includes the Digital and Functional Printing, Enterprise Services and Solutions, and Graphics, Entertainment and Commercial Films units. Kodak’s digital businesses now make up about three-fourths of total revenues. kodak.com

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