Kodak to End Digital Camera Business
By: Mark Gruba
Updated: February 10, 2012
Kodak announced Thursday it will stop producing digital cameras as part of its effort to return to profitability through bankruptcy.
"It definitely will be different not to see Kodak options for consumer photography," said RIT Lecturer John Ward, who spent 20 years with Kodak in marketing and new products.
The company will phase out its digital cameras, pocket video cameras and digital frames by July. It expects to save $100 million a year going forward as a result of the move. In the short term, it will cost the company $30 million to unwind the business division.
"It doesn't surprise me too much that moving out of the digital cameras and some of the products similar to that is one of the first places they decided to reduce," said Ward.
For Kodak the profit margins were too small in digital camera sales according to Ward. "Sometimes it's frustrating when people seem to think that all we had to do was jump on the digital bandwagon quicker, well that digital bandwagon was not a very stable bandwagon," he said.
Still, for the company that built its reputation making cameras, Thursday's announcement was a bombshell. Kodak founder George Eastman introduced the camera to the masses 132 years ago. "Kodak is an iconic brand, we've always known that, but this is a brand that now is in bankruptcy," noted Financial Analyst Doug Hendee of Brighton Securities.
Now Kodak's focus is on emerging from bankruptcy profitable. How the process of eliminating the digital camera division will impact local jobs in unclear. The company would not speculate on potential layoffs. It said 400 people are employed worldwide in the digital camera operation, about 120 of those in Rochester.
As Kodak evaluates more divisions within its consumer and commerical lines of business more changes are expected. "It's all about how resources it consumes to be in the business and how much profit does it provide us," said Ward.
Those at Brighton Securities believe the blueprint will involve focusing resources toward the more profitable commercial lines of business. "We as a firm believe that ultimately they will shed consumer completely," said Hendee. "I think this is a way of making that division look more profitable by eliminating non-profitable lines."
Kodak will continue to operate retail kiosks, consumer inkjet printers, Facebook apps, the online Kodak Gallery, camera accessories as well as film and photographic paper. The company also said it will honor all warranties and provide technical support for those who currently own Kodak digital cameras, pocket video cameras and digital frames.
"It definitely will be different not to see Kodak options for consumer photography," said RIT Lecturer John Ward, who spent 20 years with Kodak in marketing and new products.
The company will phase out its digital cameras, pocket video cameras and digital frames by July. It expects to save $100 million a year going forward as a result of the move. In the short term, it will cost the company $30 million to unwind the business division.
"It doesn't surprise me too much that moving out of the digital cameras and some of the products similar to that is one of the first places they decided to reduce," said Ward.
For Kodak the profit margins were too small in digital camera sales according to Ward. "Sometimes it's frustrating when people seem to think that all we had to do was jump on the digital bandwagon quicker, well that digital bandwagon was not a very stable bandwagon," he said.
Still, for the company that built its reputation making cameras, Thursday's announcement was a bombshell. Kodak founder George Eastman introduced the camera to the masses 132 years ago. "Kodak is an iconic brand, we've always known that, but this is a brand that now is in bankruptcy," noted Financial Analyst Doug Hendee of Brighton Securities.
Now Kodak's focus is on emerging from bankruptcy profitable. How the process of eliminating the digital camera division will impact local jobs in unclear. The company would not speculate on potential layoffs. It said 400 people are employed worldwide in the digital camera operation, about 120 of those in Rochester.
As Kodak evaluates more divisions within its consumer and commerical lines of business more changes are expected. "It's all about how resources it consumes to be in the business and how much profit does it provide us," said Ward.
Those at Brighton Securities believe the blueprint will involve focusing resources toward the more profitable commercial lines of business. "We as a firm believe that ultimately they will shed consumer completely," said Hendee. "I think this is a way of making that division look more profitable by eliminating non-profitable lines."
Kodak will continue to operate retail kiosks, consumer inkjet printers, Facebook apps, the online Kodak Gallery, camera accessories as well as film and photographic paper. The company also said it will honor all warranties and provide technical support for those who currently own Kodak digital cameras, pocket video cameras and digital frames.
