Kodak exits digital camera market as it struggles to compete with increasingly popular mobile phone cameras.
The decision came after the analysis of industry trends and it is expected to save about $100m a year. Therefore Kodak, which once held a dominant position in photographic film industry, is to stop making cameras as well as video cameras and digital picture frames. It plans to phase out the product lines in the first half of this year and look for other companies to license its brand for those products. This is a historic comedown for the company which brand name is still strongly associated with photography all over the world. The firm will now focus mainly on photo printing and commercial inkjet presses which prove more profitable. It has spent hundreds of millions of dollars on new lines of inkjet printers since 2005.
It seems ironic that, although Kodak invented and developed digital photo technology, it is now unable to keep pace with its much cheaper rivals in the Far East. This same technology, which can now be found in mobile phones and other digital devises, contributed to company’s failure. Its heavy financial reliance on film allowed rivals to take over the digital market. Perhaps if Kodak was more willing to shift from film to digital technology the crisis could have been avoided.
Exiting the industry is expected to cost the firm $30m, mainly related to separation costs as many jobs will be eliminated. The company is currently trying to sell its 1,100 patents which, it believes, are worth more than $1bn.
Also see: Kodak's struggle for survival
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