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I think Kodak merely picked the wrong pivot. They thought they were a photography company, but they were actually a chemical company. There is plenty of demand for chemicals these days, and if they had stuck with that, they'd be doing fine. (I think these days they brand themselves as an "imaging" company, and they sell products like document capture systems. But that really makes them a software company, and I doubt they're doing great there. Document capture will probably be taken over by phones; Google is already playing with that and I'm guessing they have better software development teams than Kodak.)

Fuji was in a similar place, of course, but they were already making high-end cameras and they were selling well. I use a GW690ii from 1985 regularly and it has one of the best lenses I've ever used. They did not forget how to manufacture those over the intervening 30 years, and there is plenty of market for lenses. (Though I would still worry. Tiny cell phone cameras are becoming better and better every year, and that's really a function of the sensors, which they buy from Sony.)

Ironically, Fuji did kind of screw over the film photography community recently. They stopped making 4x5 Velvia 50. They stopped making Acros 100. Now everyone is using Kodak or Ilford film. But it's because they could afford to, getting someone to buy a new digital camera every couple years is way more profitable than making chemicals for a super niche industry. Kodak still doesn't understand that, but they do get some of my money as a result ;)




The chemical division of Kodak, Eastman Chemical, was spun off in 1994 and is doing well.

https://www.reuters.com/article/us-eastman-kodak-idUSTRE7BN0...


So they divested themselves of the profit making part of their business and doubled down on the generic, modularised part of the business based on technologies they had no advantage in. Nice!


What makes Eastman the spinoff and Kodak the "they" in your statement? The name? That should be 100% a branding decision, and presumably the Kodak name was more valuable attached to the mostly B2C camera business than to the mostly B2B chemical business. If not the name, then what is the token of "genuiness" that stayed with Kodak?


I’m going by the article. “Eastman Kodak spun off its chemicals business to help pay down debt.”

At the time the CEO was quoted “Mr Whitmore, who has been under pressure to restructure Kodak, said Eastman Chemical would be spun off as an independent public company...”.


Sounds like HP spinning-out Agilent, doesn't it?


Speaking as someone who had a second-row seat to Kodak's failure to meet the future, it was absolutely a case of stuck-in-the-past. The brass in Rochester just couldn't, wouldn't believe that the light at the end of the tunnel was a train, and they hobbled their own entries into that market at every turn.


I read somewhere, and sorry I don’t remember the source, that Kodak knew the digital future was coming, but they didn’t believe the speed with which it arrived. Kodak was one of the first companies with digital cameras.


https://en.wikipedia.org/wiki/Steven_Sasson

> Steven Sasson invented the first self-contained digital camera at Eastman Kodak in 1975.


Yep, but the CCD was made by Fairchild. The only significant value add that Kodak had to bring to the table - film - was absent. It's not as if CCDs weren't being used to capture digital images before Kodak. They didn't even invent the digital imaging technology in the device. All they did was package it in a portable system.

I'm not trying to trash the achievement of constructing that device, it was a marvel of engineering, but I think it must have created a misconception in the company that they had a special competence in this area that they really didn't have.

I remember Kodak supporters constantly turning to this as the reason why Kodak would succeed, while it was visibly failing. They did develop a CCD sensor business, but they divested themselves of it in 2011 as part of a strategy that "it would sell assets that are not central to its transformation to a profitable, sustainable digital company".

https://www.dpreview.com/articles/4182673881/kodaknews


> They did develop a CCD sensor business, but they divested themselves of it in 2011 as part of a strategy that "it would sell assets that are not central to its transformation to a profitable, sustainable digital company".

If they hadn't made market strides with a CCD by 2011; I'm pretty sure that means they missed the mark entirely. If they had beat Sony's digitization of Minolta; or figured out mirrorless first would have been there best out prior to 2011.


They were addicted to fat film profits and couldn’t read an exponential curve.


Kodak was larger than the entire digital camera industry currently is, by almost 3x, $31 billion[1] in 1993 dollars which is 31 billion in 54 billion in 2018 dollars[2].

The entire digital camera industry was worth about 18 billion in 2017[3]

Even if they captured 100% of the market (which would have been basically completely impossible), it would have been a massive disaster for them as a company, and to the hundreds of thousands of people they employed in photo processing.

[1] https://www.photosecrets.com/the-rise-and-fall-of-kodak

[2] http://www.in2013dollars.com/1993-dollars-in-2018?amount=310...

[3] https://www.researchandmarkets.com/reports/4514578/digital-c...


Does that 18 billion include the smartphone industry? I think phones are the real successor of the mass-market element of Kodak’s business.


Pivoting from making film and cameras to making cellphones would have been like McDonalds pivoting into becoming a laptop manufacturer.

Yes, cellphones contain a camera, but the similarities end there.


You're talking from an industrial perspective and the parent is talking from a user perspective. You're both right.

Smartphones replaced compact cameras for a huge portion of casual photographers but as you point out it's not like camera makers could easily pivot into making smartphones (some of them probably could have if they had anticipated the trend enough, but by the time the iphone came out it was probably already too late to catch up).


The point is that, if that $18B number includes phones, Kodak wouldn’t even be able to address that part of the market (as you pointed out), rendering the addressable market even smaller in comparison to their previous position.


That's probably true but good luck when your primary revenue source falls off an utter cliff which is basically what happened with film sales. You basically have to build a new $20 billion company within a few years.


Oh yeah I get it. They were in a tough spot. But they still almost went out of their way, it felt like, to screw with the parts of their business that were trying to save them.


The corporate structure was completely dysfunctional too. The company was basically a set of independent fiefdoms, and the CEO was completely incapable of reining them in. There were many times where the CEO would announce layoffs and the department heads just ignored him and headcount just kept rising. Great example of Parkinson's law in action.


Sound similar to the Nokia story, only Kodak doesn't have unrelated Microsoft to blame for their internal failure.


Nokia as a company was doing fine - it was the phone (and, specifically, the smartphone) portion of their business that was having trouble keeping up.

Nokia as a company is still doing well, in fact


Sadly, this sounds endemic of so many companies in NY


Sadly a similar thing happened to Polaroid. They had some excellent chemists and from what I heard from former employees it that they where able to create almost anything.


> (Though I would still worry. Tiny cell phone cameras are becoming better and better every year, and that's really a function of the sensors, which they buy from Sony.)

Cellphone sensors are their biggest limiting factor. Specifically, the size. Apple already seems to have squeezed as much "photo" as it can out of its sensor+image processing combination, and is using its image processing for other things (3d photos, fake bokeh).

35mm is pretty much done too in terms of large advancements in basic photo IQ. Nikon's very first full frame camera (the D3) was already 90% of the way there, and for the last 10 years they have been squeezing that last 10% out. Fujifilm isn't even competing there - they have gone for a larger sensor out of the gate.


>Fujifilm isn't even competing there - they have gone for a larger sensor out of the gate.

95% of Fujifilm's money is from smaller sensors. The niche "medium format" stuff aside, most of their cameras are APS-C.


Digital cameras are hardly a small market and they had the technology first. They just got stuck in the past.


The are a tiny market compared to kodak at its peak with film.


It doesn't have to be small in itself, just small in comparison to what Kodak did in the past, which is it.




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