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Kodak files for bankruptcy (marketwatch.com)
164 points by leak on Jan 19, 2012 | hide | past | web | favorite | 70 comments

It is ironic that Citibank now ultimately will be calling the shots at Kodak because of the $950M "Debtor in Possession" line of credit: http://en.wikipedia.org/wiki/Debtor-in-possession_financing

When Citibank was bankrupt the Secretary of the US Treasury gave Citibank $45B for preferred stock - basically no strings attached. Shareholders of Citibank kept their equity. The Citibank management that had run it into the ground and stayed in place will now be the ultimate decision makers at Kodak.

Why isn't anyone talking about breaking up these "too big to fail" banks? When they get in trouble again now they will be able to point to saving Kodak as another reason they should be bailed out. If you saw this situation in a third world country: National government loans to bank, bank loans to industry; you would see this a croneyism and not be likely to invest or build a business in that country.

You should also note that the US Treasury ended up making $12B on that deal after repayments.


So you have no problem with the Secretary of the Treasury being the VC in chief for the US, deciding what companies are worthy of investment?

I think in hindsight it was a good move. Probably not the best move possible, but certainly better than letting a total collapse happen.

Regardless of what I think, my point was that your phrasing made it sound like it was a gift when in reality it was a very profitable transaction for the treasury.

I agree it was best not to let Citibank collapse because of the ramifications that would have on other businesses that rely on them for working credit.

But now that the crises is over break them apart into smaller banks that are small enough to fail. Otherwise US taxpayers are liable to cover bad bets that Citibank makes yet any profitable bets stay with the company.

I would argue breaking up AT&T to allow competitors worked out to the advantage of the public AND the shareholders. The smaller baby bells now had to compete and returned more to shareholders than the monolithic AT&T would have.

Sure, but nowhere near as profitable as for the bank, which was saved from near-certain collapse. If you are in a negotiating position like that, you work it for a lot more than the USG did.

Specifically, you have the moral obligation to negotiate that position for the benefit of citizens at large. The government did not do even really attempt to do that, which is a political crime for which there has not yet been a reckoning.

The objective was to prevent collapse. The return was just a bonus. It would have been the height of irresponsibility to lose time while negotiating a bigger vig for the tax payers as the financial system burns to the ground. A 25% return in two years is nothing to complain about and if the return had been say 50% it would still be almost completely unnoticeable to the tax payers.

That doesn't mean it was right to not change the source of the problem after the crisis, but that's a whole other debate.

> So you have no problem with the Secretary of the Treasury being the VC in chief for the US, deciding what companies are worthy of investment?

Nope, but the bank deals were much less evil than the auto bailouts, and not just because the auto bailouts are going to lose 10s of billions (or is it 100s) of dollars.

And then there's barney frank and chris dodd, the lead protectors for fannie and freddie (who we now know lied about their subprime exposure). The former will finally leave congress this year and the latter left in 2010, but is now pushing SOPA for MPAA.

Solynda et al is somewhere in here.

And let us not forget lightsquared, the folks who are trying to screw gps.

> You should also note that the US Treasury ended up making $12B on that deal after repayments.

Never rely on reporters from CNN to do arithmetic. This is the daily TARP update:


From http://www.treasury.gov/initiatives/financial-stability/brie...

Edit: And for the record, that is from the US Treasury, who you know is going to put it in the best possible light(ie, least loss of $$).

It is top-down resource allocation, plain and simple. Very interesting for a country that calls itself a "free market capitalism". I guess that is true to the point that those at the top are free to invest the money as they like (and even "take risks" with it).

The US Government did a horrible job of negotiating the refinancing of the banks. If they were smarter, they would have hired a tough distressed-debt guy and got a deal that was doable, but made it clear to the bank management that they were no longer in the driving seat.

Even if they hadn't driven a hard economic bargain, the government could still have imposed salary/bonus restraint. The argument that the banks had is that everyone would leave : The reality is that in a hyper-regulated business, the government/FINRA could just politely suggest that people either stayed in their current jobs (to comply with their regulatory duties, etc) or leave the industry...

Great article from The Economist on what mistakes Kodak made and what led them to bankruptcy compared to Fujifilm: http://www.economist.com/node/21542796

There's been a lot of wink-wink nudge-nudge over the years to the effect that Fujifilm was subsidized by the Japanese government; to what extent this was the favorable tax deals Kodak also got and to what extent it was real was and is hard to assess, but it is certainly the case that Fuji was not burdened by the antitrust pressure that led Kodak to divest itself of its camera-making arm in the middle of the 20th century. There's a lot of claims to the effect that Fuji piggybacked on the pioneering Kodak research work, and this is very difficult to refute, but if they did they at least equaled Kodak in quality. When people talk about "cheaper film" it was, but not that much cheaper and at least the equal in quality, sometimes better; I found Fuji's consumer films to be far preferable to that turd Kodak called Gold 400.

No one in the industry was really prepared for the nose dive film sales took; essentially only die-hards like me still buy it. Film was and is to some degree still capable of more resolution, more dynamic range, better color fidelity and less prone to weird errors in the way that a Bayer sensor does (almost every Bayer ever sold to consumers had a detail destroying filter attached to it because the alternative is horrific Moire effects), but the speed of editing digital caused it to take off like a rocket. I suppose the lesson to be learned there is that Kodak spent a century making the very best film it possibly could (for the professional lines, anyway) when it turns out the market is perfectly happy with a 4 MP digital with a mediocre lens and chromatic abberation out the arse if it cuts the feedback loop down from days to seconds.

I have mixed feelings about Kodak in general--they had a tendency to make bizarre decisions that led the few film enthusiasts remaining to believe that it was simply a matter of time before everything got the shaft and they would have to switch to something else anyway. They also made a lot of really bad digital cameras, which was strange considering the superb reputation their press lenses and the Retina had back in the day. Fujifilm never divested itself of its cameramaking arm and continues to make some of the best lenses in the business to this day, and I think that has been a very important strength for them.

> but the speed of editing digital caused

I'd also expect the storage convenience to have had an impact, you can store dozens to hundreds of pictures in a memory card the size of a nail (a pretty huge nail for CF cards, but most of the market will be consumers shooting on SD anyway) and you can offload them into a computer or a bigger storage system at the end of the day, instead of having to lug around cases of film.

There's also the ability to quickly remove "failed" or extra shoots on the spot without wasting a valuable spot in the card, where film... a photo taken is a spot taken, no going back.

> I suppose the lesson to be learned there is that Kodak spent a century making the very best film it possibly could (for the professional lines, anyway) when it turns out the market is perfectly happy with a 4 MP digital with a mediocre lens and chromatic abberation out the arse if it cuts the feedback loop down from days to seconds.

I'm not sure your argument is much helped by you comparing professional film with consumer point-and-shoot from 5 years ago.

Actually one of the cameras I was sort of thinking of when I wrote that was Nikon's D1H, which was very low resolution and not great at controlling sensor noise but was very popular among sports photojournalists because it was very very fast in use. If you were interested in the quality of the photograph you got, they were incredibly unappetizing.

But even comparing consumer film lines to consumer digicams of five years ago, the film had it all over the digicam in terms of resolution, color fidelity, responsiveness (not unusual for there to be a multi second lag time between pressing the button and a photo being taken on those), just technically slaughtered. But because you get results right now and don't need to spend $6 getting it developed, hey. One of the reasons 4 MP was enough was because consumers rarely enlarge a photograph past the 4x6 prints they get from the mini lab, so the advantages turn out to be mostly not interesting.

For the average consumer, $6 is probably less of an issue than the hassle of physically going to the drug store to get the pictures developed. I don't want to part with my 6 bucks, but I really don't want to waste two round trips to the store to get physical images when I could instead just upload them to the website of my choice (for free or at least cheap).

Beyond that, film is just a pain in the ass. You can carry a single card that holds hundreds of images, or you can carry 4 rolls of film and get 96 images. Every time you take a picture, you're counting down the number of images you can take. And you need to buy the right ISO, even though you're an amateur and don't know what the hell ISO is.

Film was destined to die out for casual photographers as soon as digital reached the "meh, these photos are okay" stage, because "okay" is good enough for most people, and film is just so inconvenient in comparison to digital.

"Kodak spent a century making the very best film it possibly could (for the professional lines, anyway) when it turns out the market is perfectly happy with a 4 MP digital with a mediocre lens and chromatic abberation out the arse if it cuts the feedback loop down from days to seconds."

Which is exactly the same phenomenon that occurred with music. The industry kept moving to better and better formats, only to be confounded that people didn't mind lower quality lossy compressed mp3s with swishy sounding hi-hats.

> The industry kept moving to better and better formats

These formats were never made available outside "the industry". I've seen almost no artist (outside of Bandcamp which does it by default/for free) providing lossless downloads, let alone HQ tracks or 3+ channel tracks on normal albums. Reznor is the only one who comes to mind (he released multitracks and 24b/96KHz of Ghosts I-IV in the Deluxe editions)

I think they weren't strictly talking about digital formats. From vinyl to cassette to CD to 128kbps MP3 isn't a strictly increasing curve in terms of quality, though one could argue that in terms of convenience the formats did improve.

Off the top of my head, Peter Gabriel, The Beatles, OK Go, and Jonathan Coulton have all released lossless digital files before (and still do). Peter Gabriel and OK Go use Apple Lossless, JoCo uses FLAC, and The Beatles use FLAC (although not via download -- their USB Box Set was a flash drive and had 24/44.1 FLACs).

(Oh, and Reznor's released other lossless albums too -- The Slip [24/96] and the NINJA 2009 Tour Sampler.)

Super Audio CD and DVD Audio were both introduced around the turn of the century.

Exactly what I was thinking of, and they've been DOA. Before that DAC was fairly widely available, but there wasn't much content available on them and were usually used as a studio medium.

He might be referring to

  tape->phono->cd-!->mp3 (originally not well received)
                \-> mp3 if called iPod

To say the mp3 was not well received before the iPod is goofy. You remember Napster right?!

Before that- in the '80s- it failed. We had "perfect" reproduction. Who was going to settle for less than that? Oh, I see, people who don't really care about perfect reproduction and want to listen to 1200 songs at the gym.

But to answer your question, I never used Napster (but I know it was popular).

Perhaps worse is better.

Convenience is better.

Records, arguably, provide superior sound to an MP3 player, but can you bring a 2,000 record collection with you when travelling?

(As an aside, can you talk more about the Bayer detail-destroying filter? I love this stuff.)

Most CCDs extract color information using a Bayer Filter[1] over them. Each square is a pixel in the megapixel count (a 1 megapixel sensor would have 250k red, 250k blue and 500k green photo sites). Algorithms are used to get RGB values for each pixel in that setup (luminance is extracted from the green sites). However, all the algorithms for the Bayer filter have a tendency to generate Moiré patterns[2]. To combat that, most sensors have anti-alias filters in front of them. This reduces the size of detail that can resolved by a sensor, but it also prevents some of the ugly consequences of the Bayer filter.

Some companies have experimented with other sensors or other patterns. The new Fuji X-PRO1 is using a non-Bayer filter, which should be interesting if it works well (it also does not have an anti-alias filter). There are also Foveon sensors, which use the selective permeability of silicon to different kinds of light instead of a pattern of photo sites.[3]

[1] http://en.wikipedia.org/wiki/Bayer_filter [2] http://en.wikipedia.org/wiki/Moir%C3%A9_pattern [3] http://en.wikipedia.org/wiki/Foveon_X3_sensor

He's talking about anti-aliasing filters (http://en.wikipedia.org/wiki/Anti-aliasing_filter), which essentially blur the image enough to mask moire (http://en.wikipedia.org/wiki/Moire).

Because this is the internet, I feel obliged to point out the inaccuracies of some of his other statements:

>>Film was and is to some degree still capable of more resolution, more dynamic range, better color fidelity and less prone to weird errors in the way that a Bayer sensor does<<

First of all, film and digital sensors of comparable sizes have nowhere near the same amount of resolution, dynamic range, or color fidelity. Digital sensors simply murder film in every category. (You can make the argument that B&W film still has some an edge in terms of dynamic range, but considering you're matching it against RGB sensors, I'm not sure that's fair.) Even 8x10 film is now out-resolved by medium format backs.

In terms of color fidelity, there is no film emulsion that will get you more accurate results than properly color-managed digital equipment. Which is exactly why museums and people who care about accurate color reproduction use digital capture.

Finally, the anti-aliasing filters aren't exactly a big deal. Yes, they degrade image quality. Yet, even with them on most consumer sensors, those sensors still massively out-resolve, and produce sharper images, than comparable film. Also note that most medium format backs don't have AA filters.

So, while somebody might like using film (or may need to in certain circumstances) the arguments presented aren't exactly the best justifications for doing so.

Just 'cuz I can't let this pass without comment, same as you can: let's take a nice color film and compare this. Say, Ektar 100; in the past I might have used Ektar 25 for this but 100 is a nice speed good for outdoors shooting or controlled lighting conditions. I'm using a Kodak film here both because we're talking about Kodak and because they offer superb information on their products. I'm using a color film because technical B&W films exist and are superb for their application but are not really suitable for general photography, plus are more directly comparable to digital.

Film is an analog medium, so we need some way of measuring resolution. The accepted way is line pairs per mm, or cycles per mm; a dark line next to a light line. A Bayer sensor because of the way the color filter works requires four linear pixels to resolve this same object.

Now Kodak's papers on the subject indicate that Ektar's color response desynchronizes around 20 lp/mm and reach 20% contrast at around 65 lp/mm for the red channel and 80+ for the blue and green channels. Since we're dealing with black and white lines here, we use the blue and green filters as they will still be visually distinguishable. We can argue whether further than 20% contrast is relevant but it seems like a decent enough stopping place. Fine. So the film can resolve 80 lp/mm.

Actual gate size varies a little but generally it is considered to be 36mm x 24mm. So that translates to 11520 x 7680 or an 84 megapixel camera, under perfect conditions.

In realistic use because of diffraction you are unlikely to get 80 lp/mm on the film, the film is not likely to be flat, you probably can't hold the camera perfectly rigidly, etc. It is generally accepted by archivists that 4000 DPI scanning is good enough for archival, which translates to about a 5700 x 3800 image or about 20 MP. In 8x10 that translates to about 1.2 gigapixels, although when you get to that point 4K DPI is probably overkill due to the diffraction limit reached at typical 8x10 working apetures.

As for dynamic range, Kodak doesn't show when Ektar 100 shoulders off but it has minimum 11 stops of dynamic range. I've used Ilford's XP2 when shooting a wedding before, and that has a bizarre shoulder with something like 13-15 stops of dynamic range. Digital cameras are typically more like 7 without using HDR, and HDR is not well suited to anything that isn't completely static.

Finally we get to color fidelity. Kodak worked very, very hard to be as precise as possible with their films and largely succeeded; you can find in the Ektar 100 tech document precise filter recommendations to cancel out the oddity of florescents if you know what sort of florescent you're working with. If you are fortunate enough to use flash, all flashes are designed to emit a precise blackbox radiative spectrum that corresponds to daylight, where the films are balanced. EPP, which is a long obsolete reversal film that I have worked with, was used a lot in catalog photography where it was vitally important that the color used in the catalog must match precisely the color that was photographed, and it was very good for that. Digitals are theoretically more flexible and thus have the potential for better color fidelity, but to do that you basically need to know precisely which lights you are using and at that point you're in the same boat as film users.

Now, is all this really compelling reasons to go to film? Not really. But I spend all day every day working in front of a computer and I'll be damned if I'm going to spend my hobby time calibrating my monitors and messing with scanners and printers (each in a dead heat for most miserable fucking peripherial ever), so I do traditional darkroom stuff, occasionally including some color work.

1. I didn't check your numbers, but I'll assume you're correct. However, in my experience, film does not even come close to approaching those theoretical lp/mm numbers. This test, done with Ektachrome instead of Ektar, reflects my own findings: http://www.luminous-landscape.com/reviews/cameras/iq180_vs_8...

2. Ok, you're right. Some films will certainly outperform some digital. But, the new MF backs will shoot 13-15 stops as well, so who wins? I'd argue that, on average, digital trumps film. I've shot mostly velvia (the most popular landscape/wildlife film for 30 years?) and provia, and those can't compete with even my 3 year old dslr. (see http://www.clarkvision.com/articles/dynamicrange2/ for tests done with an 8 year old dslr)

3. Get a color checker (http://xritephoto.com/ph_product_overview.aspx?ID=1192). No filters necessary, and precise color no matter what lighting conditions. And, you'd be able to eliminate one of those miserable fucking peripherals.

FWIW, going digital has tremendously simplified my workflow and allowed me more shooting time with less dicking around with equipment time, and much better quality prints (and I make really big prints). Cheers.

Oh, no question that you have a better MTF from an Alpa than you would from an 8x10 at f32 (a perfectly reasonable working aperture for 8x10). I think the 8x10 can still out resolve the Alpa but you're getting into that ugly 20% part of the MTF curves. The rule of thumb I've had for a while is that digital has fewer, better pixels; the digital back hits a wall beyond which you cannot proceed any further, but at and up until that wall the results are superb. I think the current sweet spot is speculated to be 6 cm x 9 cm cameras, mostly because of diffraction and film flatness issues. And reversal film has notoriously poor dynamic range, and mediocre color correction; that's one of the things that pushed me to doing all negatives in my photography.

A professional is probably only going to use film these days if they want a specific effect; say, infrared, or sometimes people fart around with Holgas and call it art. For an amateur, the $20,000 digital back that can compare with a 4x5 with some decent lenses costing a tenth that much is a much harder sell. And that's pretty much where I sit; I'm not going to spend $50,000 on a top of the line MF outfit. I might spend the $1.2K for an X-100, though, still mulling that over. A couple thousand buys a lot of film and developer.

regarding hobby stuff - have you looked into computational photography at all? coded apertures, plenoptic cameras, etc?

Sad thing is that Kodak invented the digital camera. At the time the sales of the film for their Kodak camera's were doing so well they decided to shelve the project instead of jeopardize those sales. (That is how I understand it anyway)

20 years or so later everyone has a digital camera and all Kodak has are some patents.

Another major issue is that they were late to the party with their digital cameras. Once all smartphones had decent cameras, the niche they carved in easy to use snapshooter cameras became displaced while those companies that focused on digital SLRs boomed.

A smaller SLR segment boomed as the costs of distribution fell due to the internet, rewarding content creators while phone cameras becoming just as good and a lot easier to use for the typical snapshooter.

It almost reads like a case study in "Innovator's Dilemma."

I live in Rochester, and have had the chance to speak with several people who worked for Kodak (and some still do) about this issue. The company has obscene profit margins from film, I've heard quotes of around 20% and higher, and there was a belief that film would always be around. However, many people within the company knew film had a limited lifespan and that with the advent of personal computers, it was only a matter of time before digital took over. They also knew there was no way Kodak was going to be able to make the same profit margins on digital as it did on film. With that in mind, it made it a hard sell to get leadership to really focus on the long term..

"The company has obscene profit margins from film, I've heard quotes of around 20%"

If you are talking gross margin that sounds closer to a marginally profitable product than "obscene."

Then maybe it was the right decision(for the company at least).

For all of you speculating about what business decisions took Kodak to the current situation let me give you my perspective as someone who still buys their film products. I'm also sort of experienced in shooting digital.

I personally believe Kodak screwed film.

I mean, their new emulsions are superb, and they can run around Ilford and Fuji in circles in everything except maybe slides, where Kodak is still better but ridiculously expensive. They screwed film because they where the only ones in a position to take film into the next technological level, but kept managing that division as if it was 1980 and everybody was still printing at the lab or at their own darkroom. They should have focused more on people who still develop at the lab but scan film themselves.

The only feature they introduced that helped self-scanning was stronger carriers. They also claim dyes that ease color management in some of their color negative films but I call that bullshit. Color management in color negative film is a PITA unless you own a Kodak minilab. They had the opportunity to give everyone better color management technology by making targets that are affordable, making easy to use software or even making their own film scanner. They didn't, even thou there were strong rumors about it happening, and even while they still sell their stupid 4x6 print scanners.

Basically now scanning color negative films for most photographers is sort of a painfully inaccurate manual process. Slides are easier but also cost more and have less dynamic range than digital and similar color rendition and accuracy. Black and white can be managed by even amateur photographers but Kodak could still make it a whole lot easier.

I really would like for at least their film division to manage to go out of bankruptcy, since I have only recently began shooting Ektar and love Portra... But if they really go out of business I think I'll sell my MF film gear and start saving for a full frame 35mm DSLR or maybe a Pentax 645d.

Kodak emulsions are fantastic, I will agree with you there. I happen to actually quite like NPH and NPS (or whatever the hell they're called now) and can put in a solid recommendation for Reala, which is available in 120. I'm much more familiar with the Ilford side of the stable, where I generally prefer to go with FP4+ (still IMHO the best all-round B&W and runs rings around Plus-X) and Delta 400. I find I disagree with the TMax emulsions too much to be happy using them, but I'm assuming here that you do, because almost nobody really loves Plus-X... in that case I might recommend Fuji's ACROS as a near TMax 100 substitute. I don't get along with it for the same reasons I don't get along with TMX but it is very good at what it does.

Kodak joins a lot of older companies that just cant keep up with the changing world. Take RIM for example who said to the original iPhone “There is no way that phone can do what they showed off on stage.” It is sad but bound to become more commonplace. Blockbuster and Circuit City also come to mind as companies that used to dominate, but are now long gone.

I know of a high level marketing consultant who, in the mid-late 90's was presenting to Kodak management. The presenter before him gave a 'rah rah' speech listing all of Kodak's core competencies. Prior to starting his presentation, the consultant offered some frank words for his audience. He said that all of those core competencies were fine, but that if Kodak wasn't fully focused on digital within the next few years, they would be in deep trouble. Management didn't like hearing that and invited him to leave the conference despite it being a multi-day engagement. That's the nature of large organizations - they tend to insulate themselves from painful truths and challenges by discounting or ignoring them.

This is not unexpected, but a very sad "Kodak moment." I can't help but think about Innovator's Dilemma when I think about Kodak. Didn't they decide not to pursue digital camera so that they don't cannibalize their film business?

Kodak must be remembered for being one of the first popularizers of technology. Kodak did not invent photography, but it made it accessible to the public, putting it in the hands of the middle class and amateurs instead of just professionals. They were the Apple of the 1890s. If you want to look for a photograph of their legacy, don't look for any famous photos, but for the snapshots members of your family were taking of you while you were growing up.

This is a very sad, but also dignified way for a company to face the fact that their business model is based on technology that has passed. Now, the recording industry...

Technological change made Kodak obsolete - there's not much management could do about that. But what really annoys me is how badly Kodak management handled it.

Rather than simply winding down the business and paying cash to shareholders, they ploughed money into developing digital printers and digital cameras; a market with thin margins and where they had very little competitive advantage. It's almost like management couldn't bear the thought of going out of business so they ended up doing something worse - losing more money and THEN going out of business.

I think Microsoft has made a similar mistake. Rather than sitting on it's little nest-egg of Windows and Office and miking the cash until it runs dry, it feels compelled to waste money in areas with no competitive advantage. Bing, Windows Mobile and XBox have all provided a worse return on investment than US treasury bills.

A CEO isn't a banker. A CEO is here to make sure the business lives long and well, so basically he has to trace new paths. Most of the time, it fails.

If Microsoft sat in his little "nest-egg" of basic interpreters there would be no Office and no Windows.

I'll agree with Bing and WinMo, but Xbox? Are you serious? There's one in every teenager's household. It might have cost them a loss to get there, but, if anything, it's an investment for the future—people need to buy games (and accessories, hello Kinect) for their Xboxen.

Perhaps because the product is primarily used by teenagers, brand recognition and long-term loyalty historically hasn't mattered much in the video console industry. For example, the several billion dollars MS sunk into XBox 1 means nothing to the next crop of 14 year olds, who weren't even alive at the time.

Plus, MS has been unable to leverage XBox users into buying Zunes or Windows Phones. I suspect MS's XBox investment will ultimately amount to very little in the long term.

Really? Really? Are you really that shortsighted?

XBox is huge. It's becoming the media center for an American Consumer household. That means paying $60/year just for the "privilege" of watching Netflix in HD through your 360.

Wait 2-3 (or 4 or 5) years where a Windows Phone can play an XBOX 1 game or an XBOX 360 game in your hand. Wait until Microsoft comes up with something like Apple's AirPlay where Windows Phone apps can utilize a full 1080p screen.

Wait until they integrate more cloud services with the 360. And unveil their own Siri. Or make it so your XBOX 360 can message your phone every time a certain trend on Twitter is mentioned (agent based voice search).

Wait until an entire household of teenagers gets used to talking to their 360 to control it, having it integrate with their phones, and having it manage their social networks and cloud services, AND play some amazing games....

I have a feeling the 360 and the whole Xbox line is going to a very valuable investment and one of MS's cash cows. All of the "convergence" waves Apple is currently riding are also there for Microsoft to ride...

Shortsighted? They've been selling Xboxes for 10 years with almost no upside to date, so I'm certainly not looking at the short term picture. But I'll take your advice to wait for (something), because I'm certainly not buying MSFT in their current state.

Not to mention they hold a large amount of the market at a critical period for lock-in to their ecosystem. If they can make xbox live provide enough compelling features that you lose when switching platforms then they'll keep the current users for a long time.

Kodak was practically the first company that foresaw the arrival of digital cameras, and even built prototypes of them. They just had no idea of how quickly the market place can change. Kodak's switch to digital cameras was planned way before digital cameras were in the market. It was just done too late too slowly.


The first digital cameras for the consumer-level market that worked with a home computer via a serial cable were the Apple QuickTake 100 camera (February 17 , 1994), the Kodak DC40 camera (March 28, 1995), the Casio QV-11 (with LCD monitor, late 1995), and Sony's Cyber-Shot Digital Still Camera (1996).

It's like you are flying a plane and you know there is a mountain ahead of you, and you'll eventually need to climb, so you begin to adjust the plane ready for a climb. Suddenly a cliff appears in front of you and you crash into it.

The Apple QuickTake 100 and 150 were also Kodak designs.

Ironic that Kodak started the technological change that made it obsolete. They invented the digital camera sensor.

Seems like Kodak tried investing the right area but executed very poorly. Cameras are a great business, just look at how well Nikon or Canon are doing. Cinema digital camera market is just rising by RED and recently Canon. Why a company that started and was leading camera sensor technology, OLED displays, with tons of know how of imaging technology ended up turning into selling cheap point and shoots is beyond me.

They started as a consumer comany, indeed they invented consumer photography with the box brownie. So moving away from that was hard.

Isn't a Chapter 11 technically protection from bankruptcy?

The loser in bankruptcy is the bank. The etymology of the term comes from "banca rotta" (Italian), meaning to literally break the bench (table) from which an early bank operated.

Technically, bankruptcy is a discharge of debts and financial obligations. If there are funds available, there may be a fractional payment of the nominal value of a debt (what you hear as "pennies on the dollar" in the financial press).

What's also literally happening is that money wealth is being destroyed, insofar as the debts of of debtor are considered assets to the creditor, and that the creditor can make loans on the strength of those assets.

The bank (or other creditor) has to wipe out the loan or lien. Literally, the value of these is reduced or zeroed out.

Debt forgiveness has an ancient tradition. It's part of some of the earliest legal codes (debt sabbaticals would occur every seventh year), and is included in the Catholic version of the Lord's Prayer, though protestants generally exchange "trespasses" for "debts".

It is protection from creditors. A judge will decide which bills they can pay to stay in business and what assets they can sell and under what terms.

Common stock is probably worthless and secured creditors will get some percentage of their loan back. The hope is the company can re-organize when relieved of debts they can't pay and creditors will get back more money than they would if they forced the company to close and auction off the assets.

thankfully Wikipedia is back: http://en.wikipedia.org/wiki/Chapter_11,_Title_11,_United_St...

Amazing it took this long. I can't remember the last time I used regular film or a modal camera. I suspect when Grandma and Grandpa got digital and started sharing on Facebook, they were done.

It's a shame because like their neighbor Xerox they were technologically advanced. They were big in digital pre-2000 and slammed on the brakes when they hit short term losses.

Chalk it up as another case of large firms struggling to innovate. Makes Apple seem all the more impressive.

A lot of companies even larger than Kodak have emerged from bankruptcy though.

It's just a sign that old management methods have failed and time to change.

The problem is once something becomes a commodity, it's hard to make profit from there. I am going to be very curious to see what happens to the iphone brand in a decade. Once it would have been impossible to imagine the "walkman" brand to fade away.

yes but 'Walkman' or 'iPhone' aren't the only products made by their respective companies, and they keep trying new stuff.

Kodak is dead because they rode the analog film horse into the ground and never realized they needed to diversify and leverage their brand into something new and better for the next 50 years.

But they did, they just did it all wrong.

Kodak hasn't been a film-company for years, and in fact they still lead the industry in many ways. For example, look at the market for high-end medium format digital sensors, Kodak is still at the top of that heap. Of course, the market for $20K digital backs is... pretty small.

Kodak's strategy in the digital age was try to become a technology broker, and let others tackle transforming this tech into actual end product - but it doesn't take a genius to figure out that your licensees and customers will eventually vertically integrate and push you out entirely. Canon built their own sensors, Sony got into the sensors game and pushed Kodak completely out of the consumer sensor realm, and between those two Kodak's doom was all but sealed.

Instead, their consumer-level efforts focused on stupid, low-margin, technologically simple wares like inkjet printers and digital photo frames, all lowest-common-denominator product categories where Kodak didn't have a significant technological edge against its competitors.

Kodak invented the digital camera, but they completely dropped the ball. They needed to ship their own cameras.

Kodak sold their sensor division a few months back.

<i>&gt; A lot of companies even larger than Kodak have emerged from bankruptcy though.</i>

I'm curious as to which?

Kodak has starting to function more like a patent troll in recent years, as it seemed to lose its ability to create profits the old-fashioned way. It's gone from a truly all-around amazing company, to an increasingly parasitic force in the world.

Very sad to watch.

Point of order, Kodak didn't exactly file for what people traditionally associate with 'bankruptcy'. Chapter 11 is an entirely different beast. In the future, it's best to mention that.

RIMM to follow.

This is kinda sad, I sorta hope they pull through. Companies like Kodak have really struggled to remain relevant, and it's not really their fault.. yeah, they made a decision 20 years ago, but for it to bite them on the arse 20 years later is just not nice. It's like fooling around with someone on a Saturday night, forgetting about it and then finding out you've got a kid 20 years later.

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