Kodak and the Digital Opportunity

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10/18/2012 KODAK AND THE DIGITAL OPPORTUNITY What really changed for Kodak? 1. 2. 3. 4. The market for film collapsed in the face of digital cameras Fujifilm successfully competed in the remaining film and print market Digital camera companies overtook Kodak in the camera market Printing photographs has been losing ground to photo sharing Although Kodak dominated the North American film market in 1990 at the beginning of the digital age it gravely misread the signs of change, it poured $M500 into Advantix a short lived hybrid film and digital system in the mid-90s (1). Kodak’s revenues peaked in 1996 and in 2003 Kodak still made 70% of its revenue from film sales (4). Kodak’s decline follows both the entry of Fujifilm into the US market in the 1990s (2) and the decline in film sales by approximately 20% per annum since 2004 (3). The photographic paper market similarly declined from a peak in 2003 to about 60% of the size by 2011 (4). In short Kodak lost ground in its shrinking primary market which had been a much better revenue generator than digital proved to be (5). Kodak belatedly declared a digital strategy in 2004; eight years after its revenues had peaked. This strategy was still based on photographic prints as an end point for consumers, which proved flawed. Kodak both invented and successfully marketed professional and consumer digital cameras. It held the professional market alone in the 1990s and peaked at 29% of the US consumer market in 1999 (12). However its equipment failed to match products from more aggressive digital camera companies from Japan (5) and sales fell. Furthermore, camera phones have been rising rapidly in the picture taking market at the cost of point and shoot cameras. Kodak eventually exited the digital camera market in 2012 (7). Despite layoffs and sales of assets, attempts to revive the company fortunes failed and Kodak

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