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The Rise and Fall of Kodak 352

Posted by Unknown Lamer
from the what's-a-film-reel-grandpa dept.
H_Fisher writes "Michael Hiltzik of the L.A. Times writes with a frank look at the decisions and changes that have led to Kodak's decline from top U.S. photography company to a company whose product is almost irrelevant. He writes: '[Kodak] executives couldn't foresee a future in which film had no role in image capture at all, nor come to grips with the lower profit margins or faster competitive pace of high-tech industries.' He also notes that Kodak's story comes as a cautionary tale to giants like Google and Facebook."
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The Rise and Fall of Kodak

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  • Rochester (Score:5, Interesting)

    by macsox (236590) on Monday December 05, 2011 @08:05PM (#38274876) Journal

    I wrote an article about the impact of Kodak on Rochester, New York [mediaite.com], the city it built. Some interesting context about how technology built a city - twice.

    • Re:Rochester (Score:4, Informative)

      by StopKoolaidPoliticsT (1010439) on Monday December 05, 2011 @08:54PM (#38275306)
      Kodak's decline obviously had an effect on Rochester, but the total ineptness of government combined with the people's failure to hold the government responsible had more to do with the fall of the city. Crazy spending, high taxes, race problems causing white flight starting in the 60s, anti-business regulations like the NET offices, one party government, an unaccountable school system, a police system that was so bad that Rochester because the murder capital of NY and required the State Troopers to work with local police to get minor crimes under control, etc.

      Business, not just Kodak, has fled Rochester and skilled workers need to follow the businesses to get jobs. Meanwhile, thanks to NY's lax and generous welfare policies, people are coming in to suck off the government's teat. The state itself is tone deaf since all that matters to the state is Albany and NYC. Of course, the fact that the incompetent police chief turned mayor that caused half the problems above got promoted to Lt Governor means that we'll chuck some more money on wasteful projects like his grand idea to buy and tear Midtown down to the tune of tens of mllions at taxpayer expense, only to turn it around to a business that never actually signed a contract to develop the land in the way he announced. Oh, and the property was in tax arrears and could have been foreclosed on, but why bother when he's not spending his own money to buy it?

      Kodak, while painful, has been the least of Rochester's problems... and today, it's almost irrelevant, save for the outdated, often abandoned, infrastructure they've left all over the city.
    • Re:Rochester (Score:4, Interesting)

      by PopeRatzo (965947) * on Tuesday December 06, 2011 @12:31AM (#38276612) Homepage Journal

      Some interesting context about how technology built a city - twice.

      Not only technology, but a corporate culture from the ownership on down to management that could see past the next quarter.

      Too bad they couldn't see past the next innovation.

      Still, I'm unwilling to believe that it is impossible for a corporation to be profitable and provide a social benefit, despite all the current evidence to the contrary. I'll bet, based on no data, that if we look into the corporate history of Kodak, we'd see that they started to fail when they became too shortsighted to see either innovation or their responsibility to the community.

      • Still, I'm unwilling to believe that it is impossible for a corporation to be profitable and provide a social benefit, despite all the current evidence to the contrary

        It's not just evidence, like climate change is based on evidence. It's pretty much a solid fact, based on repetitive observation. More like how we assume the sun will come up.

        There are two simple reasons for it, one is the law - the first responsibility of a corporation is to shareholders. Not to customers, not to society, not to employees, and not to the future except as concerns the company's share price.

        That can't be disputed, it is law. While grizzled campaigners occupy this and that street, nobody is p

  • by Anonymous Coward on Monday December 05, 2011 @08:08PM (#38274892)

    Companies already know what happens when you don't continue to innovate. The book:The Innovator's Dilemma: The Revolutionary Book that Will Change the Way You Do Business goes into great detail and is basic reading at most business schools.

    • by jellomizer (103300) on Monday December 05, 2011 @09:48PM (#38275696)
      Hind sight is 20/20. There are also companies that died because they adopted a new fad technology. And lost too much money that they went out of business and should have stuck with their old model.

      For example Saturn cars (yes it was oned by GM) but they got popular on the small car with little frills. Then when gas prices were at a low they jumped ship and started making SUV and sport cars. And hitting the quality on their small car line.
      Gas prices rose. Saturn lost because it didn't have cars the people wanted.

      Jump on the wrong fad you get hurt too. It is easy to mock Kodak but the digital camera faze may have ended with some software just not easy enough to share photos. Or broad band was just too expensive for the market. Or color printers prices remained high price and offered infeaor pictures.

      Will the iPad and touch tablets stay popular. Or will windows 8 on multitouch laptops take the cheese.
      A lot of companies are investing in getting the newest tablet to trump apples IPad, but what if tablets just reach their peak the holiday season then die down?
      Do we skoff at the people who blindly jumped on the tablet fad? Even though right now it seems the hot new tech?
      • by Gr8Apes (679165) on Tuesday December 06, 2011 @12:07AM (#38276510)

        while it's true that jumping on a bad fad could bankrupt you, only an idiot would have continued to believe that digital wasn't going to succeed. The prices for digital cameras was low enough that instamatics just couldn't compete, on original price alone. Granted, the early digital cameras pictures sucked in quality, but knowing the speed of new tech improving that was solely limited by manufacturing process would quickly let you guess about when the image quality would be close to film. Moore's law and all - it was only a couple of years after the initial 1-2 MP cameras came out that the 3 and 5 MPs came out, and 5MP was good enough for a pocket camera to rival the print of a cheap 35mm camera, and that's pretty much the beginning of the real end for film. Digital didn't add on the processing costs for film, you could take 100 pictures, "process" them on the spot, and take another 100, pretty much for "free". The best film could do was 1 hour processing at a relatively high cost, and 36 max pics per roll. (I can take over 1000 in RAW mode on my current DSLR and the way oversized Compact Flash card I have)

        As for tablets, I think the market will continue to grow. There's a distinct use case for tablets, and it more than meets the needs for a large majority of the populace. Think all the current phone texters that make do with 140 characters or less thumb typing on a screen keyboard far too small for their fingers being able to enjoy much larger real estate of the tablet.

        The real issue with the tablet "fad" is a bunch of companies that think throwing some hardware together in a roughly tablet sized package is sufficient keep failing, and they'll continue to fail. It's more than just hardware, if they want to even enter the edge of the iPad market.

        • by Kjella (173770) on Tuesday December 06, 2011 @02:51AM (#38277226) Homepage

          (I can take over 1000 in RAW mode on my current DSLR and the way oversized Compact Flash card I have)

          Sure, now but you're not winning any points for predicting this in 2011. I remember having a 512 MB card that could fit about 100 pictures, and for a weekend trip that was barely enough. Those before that sucked even worse. I remember thinking with a film I could at least just snap in another film and keep taking pictures, it wasn't anything like "snap as many pictures as you'd like" unless you felt like going through them on the tiny little LCD monitor on the camera. And it was very expensive. It's easy to say it afterwards but I don't think it was nearly as obvious back then. And when it was obvious, maybe they felt they were too late to the party.

        • by thegarbz (1787294)

          The prices for digital cameras was low enough that instamatics just couldn't compete, on original price alone.

          The problem is that this wasn't the case at a time where camera companies were putting in the most R&D. Long before the Sony point and shoots with the floppy drive in the back hit the market Kodak was working with Nikon releasing DSLRs. These were typical film bodies with digital processing units slapped on the bottom. They increased the weight and size of the camera 4 fold. Anyone at the time would have thought digital to be a complete joke.

          The first point and shoots were incredibly expensive and took

  • by Kenja (541830) on Monday December 05, 2011 @08:08PM (#38274898)
    Kodaks whole business was founded on film development. The whole idea was that they sell the cameras cheap and charge for the development. Was that way going back to the glass plate days. Simply put, they where rendered irrelevant by digital photography which is the exact oposite market. Expensive cameras, free "film". While its sad to see them go, they are more or less a lost cause now.
    • by bigredradio (631970) on Monday December 05, 2011 @08:20PM (#38275018) Homepage Journal

      more or less a lost cause now

      I would say less. If they were able to cut their expenses to the bone, then take on additional funding to create innovative imaging products, then they would have a shot. Their brand recognition is still worth a lot. There are a lot of people over 30 who will have some trust in new Kodak products.

      Unfortunately, they have tried to create products by copying the status quo. They should raid developers and designers from Apple and try a fresh start.

      • by Kenja (541830) on Monday December 05, 2011 @08:30PM (#38275108)
        I wouldn't be shocked if a company like Pentax (who has good digital products but limited consumer name recognition) to buy the Kodak name for use in a new low end consumer product line.

        But Kodak is still trying to cling to the film business. Their new products are things like a digital camera with a built in printer, sort of a hybrid version of their older instant cameras. People just dont seem interested.
        • by JoeMerchant (803320) on Monday December 05, 2011 @09:32PM (#38275556)

          I find it interesting that the Kodak name plus their patent portfolio, only nets a $300M market cap. They must have a lot of liabilities to drag them down that low.

        • Pentax was bought by Ricoh, so that Ricoh would have a brand with better name recognition!
          • Sounds like Ricoh should have waited and bought Kodak.

            I'm not a camera buff, but I do recognise both names - but as a consumer Kodak is a much bigger name.

            • by Sique (173459) on Tuesday December 06, 2011 @06:07AM (#38278012) Homepage

              Kodak is pretty much a north american name. In Europe, if anyone thinks about cameras, it's not really Kodak, that comes to mind.

              • by Dogtanian (588974)

                Kodak is pretty much a north american name. In Europe, if anyone thinks about cameras, it's not really Kodak, that comes to mind.

                Kodak *is* (or was) a very well-known name in the UK at least, even if it was more associated with film. In fact, it was almost certainly the best-known brand of film here.

                Kodak cameras are (or again, were) still well reasonably common here, though primarily associated with the low end- though I doubt that situation was/is any different in the US either.

                My first camera in the early 1980s was a Kodak 126 "Instamatic", and pretty sure that my Dad talked about having a Box Brownie (pretty much the 1950s eq

      • Re: (Score:2, Informative)

        by Anonymous Coward

        I worked on a project with Kodak to do a project for a company that dealt with disposable camera's and photo galleries. It by itself was an amazing idea and very useful even now, however they we're horrible and the project failed horribly. The world has left them behind.

        In a world where they had to do little more than free image galleries and the brand could have killed off a flicker years late, they continued to throw away everything they built.

      • by Algae_94 (2017070)
        Could they adapt? Sure, but that requires the company changing completely and going into a business they don't understand as well.

        The issue is that a company that lived and breathed film is now in a world that doesn't use film. When there is some sort of paradigm shift in an industry, the old giants are set in their ways. Even if they have the resources to re-tool and get with the times, do they really have what it takes to stay relevant? And other than some nostalgia of a long known name disappearing,
        • People who made stuff for the horse industry could find new employment in the car industry. People who worked at Kodak have no such replacement. The replacement for film camera's comes from the east and I am not talking about California. Sony for instance makes a LOT of the cheap cheerfull camera's that once used Kodak film. Those are made in Japan. Not the US. Jobs for Japanese, not Americans.

          You might look down on a job at a film development line but it gave a lot of people the income to lead their lives.

          • by JoeMerchant (803320) on Tuesday December 06, 2011 @08:24AM (#38278722)

            Read up for how societies are affected when an industry leaves for one reason or another and is not replaced. Rochester, Detroit. These are not happy stories.

            This is not about brand names, this is about the erosion of full-time, life-time employment being replaced by temporary work at minimum wages for less then full weeks.

            And that matters.

            Arguably, the problems in Detroit and Rochester are less painful than the problems in 1940s Europe that allowed Detroit and Rochester industry to flourish for the last 60 years.

      • by Endo13 (1000782) on Monday December 05, 2011 @09:39PM (#38275614)

        I don't think so.

        The problem for Kodak is that photography is more and more stratifying itself into two major categories:

        1. High-quality digital camers
        2. Cell phone cameras

        Kodak built its business on cheap cameras that anyone could afford, and, of course, the film. Cell phones are now increasingly replacing Kodak's old niche in the photography world, and they've never really been known for expensive high-quality equipment. Going electronic & digital was simply not enough, they would need to break into an entirely new market or product type to stay alive.

        • by Entropius (188861) on Monday December 05, 2011 @10:09PM (#38275808)

          They had an angle into that market; they made CCD's for high-end digital SLR's for a long time. I know they sold sensors to Olympus, among others, for years. Olympus wound up switching to Panasonic as a sensor supplier for technical reasons related to video capture, but lots of folks still swear by the old Kodak sensor cameras.

          • by mattcsn (1592281)

            Kodak also manufactures many of the high-end sensors in medium-format digital backs. The Hasselblad H4D-40 and the Pentax 645D use the Kodak KAF-40000 sensor.

          • Re: (Score:3, Informative)

            by Anonymous Coward

            Not only did they make CCDs for high-end digital SLRs, but they sold high-end digital SLRs in partnership with Nikon and Canon early in the switch to digital cameras [wikipedia.org] in the 1990s. Kodak was a genuine innovator, and for a while these Kodak/Nikon cameras were THE camera that journalists used world-wide. The cameras weren't cheap ($10k+), but they were the first cameras that could legitimately be called a replacement for film, rather than the simple cameras with pathetic 640x480 resolution that were availabl

          • Interesting, I wonder if my 2001 Olympus Camedia C-3040Z has a Kodak sensor. It still takes great pictures and has image quality that revealed modern entry level 5MP cameras that were released years after it (despite being only 3.3MP). No rolling shutter either since its CCD and not CMOS.
    • '[Kodak] executives couldn't foresee a future in which film had no role in image capture at all, nor come to grips with the lower profit margins or faster competitive pace

      Hmmmmm ... where have I seen that behavior before?

    • by imsabbel (611519)

      The thing is, Kodak was a frontrunner in digital cameras. They build the first. They had the first DSLR 20 years ago (with funky shoulder-stray storage and power units, like the lasers in Akira).

      They just pissed it away by the way of bad decisions.

      • by Guspaz (556486) on Monday December 05, 2011 @08:54PM (#38275310)

        No, they didn't make the first DSLR 20 years ago. What they did was basically sell an add-on that attached to your Nikon SLR to make it digital. Kodak never made any DSLRs themselves; they were always digital backs, or based on Canon or Nikon bodies, or sometimes just rebranded Canons or Nikons.

        There's a huge market for camera components. Film is dead (at least for stills, film is slowly moving that way), but the DSLR market is alive and well, and companies like Sony are making a fortune selling camera modules to go into the iPhone and other devices.

        Kodak could have been selling millions of mobile camera modules, or competing with Nikon and Canon for the high-end, but they're not.

        • by Entropius (188861)

          They did that -- they made CCD's for several DSLR's for a long while. Olympus got their sensors from Kodak for their DSLR's for years, and they also made some very high-end medium format sensors for Hasselblads and so on. Not sure why they wound up failing in this market, really; Olympus left them because they wanted a partnership with Panasonic for other reasons, not because there was anything fundamentally wrong with the images from the Kodak sensors.

          • by Guspaz (556486) on Monday December 05, 2011 @10:54PM (#38276132)

            Right, but at that point they should have been making their own cameras instead of just the sensor. They had a lock on the entire camera market at one point, but for some reason it seems that they never actually made their own digital cameras, just rebranded or added on to other companies'.

            The make-your-own-camera-module thing became more important as cellphones started getting cameras integrated (even when they were crap, a lot of phones had them, and there was money there even then). It wasn't (and isn't) realistic for Kodak to have made their own cellphone, but they could have gotten a chunk of the camera module market. At this point, that's probably even a much bigger market than the rest of the camera market combined; every cellphone, tablet, handheld game console sold, they all have camera modules, and Kodak isn't the one making them. Sony makes a lot of them, even for their competitors. And I've no idea who makes the camera modules in the 3DS, but it's got *THREE* of the things. More and more cellphones these days have at least two cameras...

      • by Macgrrl (762836)

        I worked for a digital imaging reseller back in the early '90s. We were a Kodak agent and sold the Kodak DCS series of camera and the LEAF camera backs. The Kodaks used a standard Nikon SLR camera body. There were options for an infra-red and aerial photography filmbacks. They were fairly advanced when you think about it.

        They released a DCS with burst capture and voice annotations for the '92 Olympics for sports photographers.

    • by stuckinarut (891702) on Monday December 05, 2011 @08:48PM (#38275256)

      A few excerpts from Kodak develops: A film giant's self-reinvention [wired.co.uk] (Feb 2010) seem to suggest they just couldn't transition fast enough rather than became irrelevant.

      ... every Oscar winner for Best Motion Picture in the past 81 years has used Kodak film... 65 percent of Kodak's business now comes from business-to-business products and 70 percent of them are digital. Hayzlett's message is simple: every aspect of Kodak's business has been reinvigorated by winds of change.

      The usual explanation is that Kodak failed to see the approach of digital.

      In fact, Kodak was more than ahead of its competitors: it invented the digital camera -- even though it lacked the foresight to exploit it.

      • A lot of people have argued that Kodak laked the foresight to go digital. I do not believe this is true. I remember when I worked in printing reading a Kodak paper about 1990 which predicted the rise of the digital camera, and how it would replace the snapshot first, as those users would compromise quality for getting to see their pictures quicker (us older folks rember taking a year or so to use a 36-exposure reel of film). The top end where people used traditional equipment, and wanted high resolution an

    • by fermion (181285) on Monday December 05, 2011 @09:40PM (#38275620) Homepage Journal
      I am not sure about the expectation that a corporation should exist forever, or that shrinkage and eventual folding is bad. Really it is this idea that a firm should be forever, and all the effort to make it happen, that creates inefficiencies in the free market.

      Kodak provided a good product, and it innovated both in the pro and consumer market. The stuff it did really brought photography to the masses, and high end photography to the pros. The cameras allowed us to take pictures. The film allowed us to accurately reproduce those pictures. The technology was not trivial.

      The think is that it is simply not cost effective to do a good job printing pictures that can just be reprinted. Archival for the family is no longer an issue. So the quality that Kodak represented is no longer needed. Which means lower markup and therefore an inability to pay for the bloated management that all corporation build up over time. This is why we need firms to go under, fire all the management, and sell all the assets. It frees up managers that are good to start more efficient ventures, and allows inefficient managers to no longer be a drag on the system. With the current idea that corporations are imortal, we have manager vampires feeding off the workers and consumers without providing any real value.

      So is there a lesson here. Yes, to the inefficient manager, be ready to be thrown out into the street. Which won't happen, as there will always be banks and courts that perpetuate the efficiency of aristocratic class. Kodak can go. They represent and inefficient past. Not buggy inefficient, but perhaps heating stove inefficient.

    • by carlzum (832868)
      Kodak may have a fighting chance in an "expensive camera, free film" market. Unfortunately for Kodak, it's becoming a free camera, nonexistent film market. The article argues Kodak's problem is worse than the auto or entertainment industries because their core products are still in demand, they just need to adapt.

      Even in hindsight, I'm not sure what they could have done other than using their capital to move into another industry. Digital cameras and picture frames, printers, printing services... they ha
  • by Anonymous Coward

    This site was one of the pioneers of tech blogs in the early days of the Internet. Then other tech blogs came, then fb commenting came and now twitter has made slashdot a total non-entity. In fact, the fact this site looks virtually the same and has no real new features in years shows how much the rest of the tech world has passed them by.

    In short, Kodak = slashdot. May they both rest in peace.

    • by Junta (36770) on Monday December 05, 2011 @08:27PM (#38275086)

      I want to say I enjoy slashdot as one of the few sites actually implementing a nice and full threaded discussion system. We aren't talking about obsolescence, but rather a preference. Too many discussion systems either reorder posts, support no or one level of reply, and other such silly limitations.

      Aside from that, the quality of commentators tends to be higher. More often than not, someone related to or very keenly aware of the subject of a story chimes in with additional data whereas most other forums explode in a barrage of inane chatter, trolls and woefully misinformed people. Yes, slashdot is subjected to that as well *but* if we are grading on a curve here, slashdot's community comes out pretty good.

      • I have to agree, whislt there are the trolls and morons, the good comments here are much more common than elsewhere,
        I have learned more about many subjects here than i have learned form the whole of the rest of the internets foums.
        Sick of people complaining if you dont like it dont come here!

      • Re: (Score:3, Informative)

        by Anubis350 (772791)
        Agreed. /. still has, hands down, the best threaded discussion and moderation system of any site which I frequent, which I think helps keeps all the knowledgeable people around, both of which end up keeping me around :-).

        I'll reiterate something I've posted and seen posted here by others before: I don't come here for the news, I come here for the comments
      • by Miseph (979059) on Tuesday December 06, 2011 @01:39AM (#38276918) Journal

        The only news site I visit with consistently higher-quality user posts is The Economist's. There are one or two others that are often comparable, but the quality here is really quite high. Considering that this is the only site I place in that tier that lacks aggressive professional moderation empowered to delete posts (and routinely doing so), that is an extremely impressive feat.

  • Next, paper. (Score:5, Insightful)

    by Animats (122034) on Monday December 05, 2011 @08:21PM (#38275024) Homepage

    The paper industry is feeling the pinch, too. Newspapers are dying, and paper mills are closing. The latest generation of computer users feels little desire to print anything. The paper industry had a "put it on paper" promotion. That seems to have disappeared.

    Paper requires an infrastructure. In business, paper implies filing, filing cabinets, folders, record storage, file clerks, trash cans, shredders, staplers, paper clips, paper recycling, and other cost items. This not only increases cost, it increases head count and makes outsourcing and offshoring harder.

    Printed forms are really expensive. Someone has to fill them out, they have to be moved around, sorted, and filed. and probably entered into into a computer at some point. It's been a long time since a forms manufacturer could advertise "the world is run on tracks of printed paper".

    There are still many businesses with a lot of legacy paper, but the trend is down.

    • by rubycodez (864176)
      I hear paper mail and its infrastructure is in decline too, but many slashdotters wailed about a country needing a national paper mail pushing system. But reality means cuts will further erode revenue in a negative feedback spiral. USPS is going down, hard
      • Re:Next, paper. (Score:4, Insightful)

        by zdammit (1143747) on Monday December 05, 2011 @09:09PM (#38275414)

        I hear paper mail and its infrastructure is in decline too, but many slashdotters wailed about a country needing a national paper mail pushing system. But reality means cuts will further erode revenue in a negative feedback spiral. USPS is going down, hard

        Really? In my country the decline in letters has been compensated for by an increase in packages, from online sales. So the postal system is changing but not declining.

    • by gman003 (1693318)

      I have one additional argument against print:

      When was the last time you went to a store and searched for a specific book?

      It's tough. I'm doing a research project on digital distribution vs. physical retail, focusing on product availability and pricing. As part of that, I physically went to several stores and checked against a list of products.

      The Barnes & Noble was terribly organized. Books were sorted vaguely by genre, then author - except teen literature, which goes in a separate set of shelves, and b

    • At the level forests are declining around the world (one word - oxygen), i say good riddance to paper industry. There is no need to even comment on the fact that digitization has made paper almost obsolete (except for legal documents/contracts). Since the digital medium provides me much better usability for getting any kind of information (ranging from news to statistics, and recently even books), i dont think i will be looking back at any point.
      • by JMZero (449047)

        Blaming the paper industry for deforestation is like blaming the pork industry for the lack of pigs. Deforestation is happening in places, obviously, but it has little or nothing to do with cutting down trees to make paper. Canada and the US are both large consumers of paper (and have been for a long time). They've had the pretty much the same levels of forest for 100 years.

        You don't cut down expensive old wood in sensitive places to make paper. Maybe you don't think farmed forests are environmentally s

  • It was all (Score:5, Funny)

    by shentino (1139071) on Monday December 05, 2011 @08:22PM (#38275036)

    One big Kodak moment.

  • by the_humeister (922869) on Monday December 05, 2011 @08:22PM (#38275040)

    It's lesson for all businesses: adapt or become irrelevant. Look at IBM. They used to make tabulating machines. Now they make most of their money selling services. Some industries change at a glacial pace (e.g. oil, cement, Christmas trees) so companies entrenched here can take their time adapting to new realities whereas other industries change pace almost daily (e.g. fashion), so companies in these industries also need to adapt very quickly (e.g. Coach, LV, etc.).

    • by rubycodez (864176) on Monday December 05, 2011 @08:37PM (#38275174)
      of course, IBM services are all about unnecessarily complex projects that are time and money sink holes. With the economy tightening up, we can only hope enough businesses see through these scams to make IBM irrelevant and out of that business.
      • Re: (Score:3, Funny)

        by Gothmolly (148874)

        Mod parent up. If you're not part of the solution, there's money to be made in prolonging the problem.

      • by symbolset (646467) *
        IBM's market cap has bounced back. Surprisingly they're worth more than Microsoft again. Companies to look at for "Failure to adapt" might include RIM, Nokia, HP.
        • by nwf (25607) on Monday December 05, 2011 @11:47PM (#38276424)

          IBM's market cap has bounced back. Surprisingly they're worth more than Microsoft again. Companies to look at for "Failure to adapt" might include RIM, Nokia, HP.

          And Microsoft. They've been running on the same two products since their heyday. Their only real innovation (a graphical office suite) was developed for the Macintosh. Everything is "me too" crap, which worked for a while.

          Apple is a good example of a company that was near death and transformed itself like Kodak will never be able to do. Then there are transformations like Westinghouse that went from dong just about everything to selling their name to the highest bidder to make crappy TVs.

    • by Locutus (9039)
      and some companies spent lots of their profits fighting new ideas and stomping them out. Read the book "StartUp" for an old look at how Microsoft stomped out the first tablet computer company almost 20 years ago. Then there's the oil industry and how they purchased the patent to NiMH batteries and won't let them be used in electric cars. Kodak just let the world pass them by and that's ok in some regards because they didn't prevent new ideas and products from having a chance in the market like a few others
      • Re: (Score:3, Interesting)

        by stewartjm (608296)

        Then there's the oil industry and how they purchased the patent to NiMH batteries and won't let them be used in electric cars.

        Not to say that the patent owner hasn't been a pain [wikipedia.org] to deal with. But, the Toyota Prius uses NiMH batteries. They're far from the best batteries for storage/weight ratio. But once you factor in operational lifetime, they're about as good as it gets at the moment.

    • Re: (Score:2, Informative)

      by Anonymous Coward

      If you get the annual reports you'd see that the plurality of IBM's revenue is Software and the majority of the profit is Software.
      IBM Credit Corporation comes in 2nd, and services and hardware vie for last place.

      • by herojig (1625143)
        Thx for pointing this out. It's rare folks here on /. speak from fact, so that was refreshing. As a retiree from IBMs software division, it seems to me that Kodak could re-invent itself just as IBM has done so many times over the course of their business career. IBM is great at cultivating and milking a technology until the teet runs dry, and then selling it off. The proof of this strategic success is in the stock - very nice.
  • Photogs? (Score:4, Interesting)

    by QuasiSteve (2042606) on Monday December 05, 2011 @08:31PM (#38275124)

    I wonder what part 'photogs' (why can't they call themselves photographers? weird.) played in this.

    You know the ones, that - even as recent as 2 years ago - still claimed digital was crap, film was here to stay as a vastly superior medium, that no professional would ever adopt digital, etc. etc. etc. The very same people Kodak probably had intimate relationships with from marketing through research.

    Not laying blame, just saying.. perhaps Kodak laid too much importance on their opinions, trusting them to be 'right' as they had been for decades earlier.

    • Re:Photogs? (Score:5, Interesting)

      by Average_Joe_Sixpack (534373) on Monday December 05, 2011 @09:02PM (#38275366)

      Kodak committed suicide in the mid 90s when management spun off Eastman Chemical, pharmaceutical and medical divisions. Management received nice bonuses though.

    • 'photogs' (why can't they call themselves photographers? weird.)

      Must be a regional thing or something, because I know of no photographers who refer to themselves as "photogs". Not even the youngins.

    • Re:Photogs? (Score:5, Interesting)

      by Sarten-X (1102295) on Monday December 05, 2011 @09:52PM (#38275726) Homepage

      From my perspective, they played very little part. The signs of digital's dominance have been around for a decade, at least..

      Real, trained, professional photographers adopted digital photography as early as 2000. It meant they could take hundreds of pictures of an event, with practically no overhead cost. An assistant could pick out the few not-terrible shots, and they would be sent to the traditional lab (or a minilab) for printing.

      The first megapixel cameras were still slower than film cameras, so a good photographer going to an event (such as a wedding) would have a digital camera on hand for routine use (like taking pictures of the bridal party, preparations, and decorations), but still keep a film camera loaded and ready for moments of action (like exchanging rings), hoping for that perfect shot when something spectacular happens (like when the groom goes diving for the falling ring).

      Photography (when done well) is a fast-paced and high-risk business. If a wedding photographer misses some special moment because they were reloading a camera, they can and do get sued. When digital became even remotely practical (several thousand dollars for a 2-megapixel DSLR), professionals jumped at the opportunity.

      That improvement didn't come without its own problems, though. Many labs couldn't handle the differences in workflows, and that drove up their prices. Now, lab prices aren't very high compared to photographers' rates (about $10 for an 8x10 with finishing coat and manual retouching (which will be the comparison henceforth), compared to the $20-$50 that the photographer will likely charge), but the lack of integration also meant that orders often were lost, delayed, or damaged, and storing several gigabytes of pictures (at $10/GB) for each event was impractical for a small studio. As workflows, cameras, and hard disks improved, film became less important as a fallback, and digital was very clearly the future.

      The next major change came in minilabs. I've mentioned them in passing already, but they deserve more discussion. As also mentioned, a full professional lab could produce an 8x10 for $10. That involves having several people preparing the film (or disk), moving it between chemical processors (or workstations), darkrooms, and printers, sitting at desks painting the white spots where dust prevented the paper from being exposed, spraying the print with any of several finishes, and eventually packaging the whole thing for shipping. A professional lab could easily fill a 30,000 square foot building. A minilab does the same job in a 60 cubic foot space. It's what you'll see in the back of a Wal-mart or pharmacy photo department now, but back in 2000 their quality was still catching up to the full capabilities of a professional lab. It cost about $0.65 for that same 8x10.

      The "photogs" I see now are working in a different sort of industry. Sure, they can press a shutter button and arrange a decent shot, but I often question their ability to anticipate the "Kodak moments" than make photo albums entertaining. Many will take pictures, and provide the digital copies, but don't understand how artistic retouching and finishes can improve an effect. Sure, there's a lot of 'em, but I don't see them as being major players in the professional supply industry. There's enough "real" photographers out there that trends are still obvious.

      For comparison, consider the differences between the bona fide audio engineering industry (where digital mixers and cheap-but-unique equipment reigns supreme, and professionals can artistically combine processors to achieve a particular desired sound) and the audiophile-supply industry (where noisy analog processors, vinyl, and high-purity copper digital cables [amazon.com] are believed to sound "better" by being highly distorted).

      Source: I used to work for a lab that was one of the first to integrate a complete digital ordering system (including a minilab, ironically) into their workflow. Said lab was eventually driven out of business in 2007 as minilab quality and prices drastically cut down the number of customers.

      • by Achra (846023)
        There's a lot of good information and good perspective in this post, although I do believe that it is heavily skewed towards wedding photography and to a lesser extent photo journalism. (Which makes sense, consider the poster's admitted background of being a photo lab technician).

        Time was, if you saw a wedding photographer with a 35mm camera, you knew they were amateur. The real wedding photographers all shot 645 or 6x6 on 220. This was still the case in 2000. The photo journalists were the first to make
  • After Sculley left Apple he did some consulting for them. Didn't they listen to him or....... maybe they did:)
  • by GrahamCox (741991) on Monday December 05, 2011 @09:28PM (#38275532) Homepage
    I lived for many years in the UK town where Kodak had its European headquarters and plant - Hemel Hempstead. It's all gone now. Even the town only "skyscraper" which was Kodak offices has been converted to residential use. Makes me wonder where all those thousands of employees are working now.

    Predicting the future is hard. Look at that scene in "The Man Who Fell To Earth" where Newton invents an instant camera. Instant is something anyone could see would be a winner, but no-one at that time saw it happening without using film.
  • I worked as a designer for a market research firm in the late 1990s and Kodak (a client) was then trying to come up with ways to remain relevant. They were always testing new concepts and business models. Not products per se, but entire new ways of looking at imaging and how consumers would use cameras and images in the future. I guess they never found a solution.
  • Kodak introduced it's first high-end (ok, that was the only end there was) digital camera in 1991, more than 20 years ago, so I think it's fair to say they should have seen this coming.

    If you can't get the ship turned around given 20 years of pretty clear notice then I don't really feel the need to get all sniffly and sad over their passage.

    G.

  • by Stormthirst (66538) on Monday December 05, 2011 @10:47PM (#38276080)

    For many years Kodak also produced a lot of the film used in x-rays. When a small hospital is producing over 100 chest x-rays a day (on a piece of film that is 35 by 43), that's a LOT of film. The chest x-ray is probably *the* most common film taken (simply because you can tell a lot about the state of a patient's heart and lungs very quickly, at very little cost in terms of money or radiation). It's a big sheet of film - funnily enough about the size of your chest. They made a lot of money with it.

    Then digital technology arrived, and Kodak did adapt - producing both CR and DR [wikipedia.org] equipment, printers, and PACS archives [wikipedia.org]. They even won a very large contract with the NHS in Britain to supply many of the hospitals with their radiography equipment.

    Quite what happened then I don't know but they got out of medical imaging, but they did at least attempt to adapt to the new scene. Perhaps their financial models revolved too much around the silver they were putting on the old films.

    • by Anubis350 (772791)

      Quite what happened then I don't know but they got out of medical imaging, but they did at least attempt to adapt to the new scene. Perhaps their financial models revolved too much around the silver they were putting on the old films.

      Bought by Onex [wikipedia.org] is what happened to it.

      Seems to be the life cycle of many a tech company. I've been wondering if the path Kodak is on now is the same that HP is starting to tread. Even the spinoff of Eastman Chemical [wikipedia.org] reminds me of HP's Agilent spinoff

  • One bad decision (Score:4, Interesting)

    by snsh (968808) on Monday December 05, 2011 @11:49PM (#38276430)

    The VP of research at EK told us a story that back in the 1970's, Kodak had a billion dollars in the bank to invent. They had to choose between instant photography and digital imaging.

    Kodak chose instant photography. I think they ended up spending another billions dollars on lawyers and on a settlement with Polaroid. In the meanwhile, Kodak cancelled a large part of its digital imaging program, after already bringing the world's first consumer camcorder to market.

    • And that their choice was wrong is only obvious with 20/20 hindsight. Who in the 70's would have predicted the ubiquitous PC, let alone ubiquitous PC's with the power of a multi-core CPU chip? Without that ubiquitous PC, digital imaging makes no economic sense.

      If you're under 40, and especially if you're under 30, there's almost no way to explain to you how different the world is today from the 1970's.

      My house has two cars (with computers of their own and both with aftermarket satnav systems), two PC's wi

  • by cvtan (752695) on Tuesday December 06, 2011 @07:43AM (#38278432)
    The article is 99% correct. Having worked at Kodak for 26 years in a non-film technical capacity, I can still remember when even digital products had the main goal of getting people to use more film. Sometimes I felt that all our early work in digital imaging was solely to prove how good film was in comparison.
    Kodak's main thrust was overall image quality and print quality, but look what has happened. People use crappy cell phone cameras for most things and hardly print anything.
    Telling example of arrogant thinking: When the disc film camera system was introduced, there was a big presentation in the Kodak auditorium explaining in gory detail why it was so wonderful. The lens was a miracle of optical engineering. It was an impressive display of whiz-bang charts and 3D graphs of the photographic space etc. Only problem was you could not take a good photo with a disc camera; all the pictures were uniformly mediocre. Kodak took years to develop the disc system and Fuji had a copy-cat camera for sale in 6 months. This from the company that invented video tape recording and decided "Nobody would want a VCR in their home." Similar logic was applied to ink-jet and thermal printing and to a lesser extent to image sensor micro-lens arrays.

    More recently, Kodak tried to sell image sensors into the cell phone market. Have any of you tried to sell anything to a cell phone company? We thought they would be impressed with the Kodak name, image quality and our proprietary image processing algorithms. They are so big they didn't care. Pricing is brutal. They want millions of parts on time or else! VGA devices are so cheap you can't make a profit. HD devices are low-volume so you can't make a profit. That leaves the middle ground of...nothing! We were earnest and naive.

    Ranting against the dumbness of big business is popular and there is certainly blame to be placed on a management that could not see into the future, relied on a high-profit fading technology and approved only boring products. I have no doubt that all the fantastically wealthy managers that have driven this once proud company into the ground will enjoy their retirement. The technical people I worked with were GREAT!

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