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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.

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