This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Kodak: The End of an American Moment

To say that Kodak tucked the digital camera away in order to avoid the inevitable would be misleading, Sasson says. Executives didn't kill the concept. They patented the camera in 1978 and poured significant resources into R&D on digital.

What bothered the employees working on the digital projects through the 1980s and 1990s is that they didn't receive the attention of a huge breakthrough that the employees of the film segments did. Kodak never mentioned the projects in annual reports. The company didn't even authorize Sasson to reveal he had invented the first digital camera until 2001.

Part of this may have been that management had difficulties coming up with a consumer plan for digital photography, another issue was Kodak's highly secretive culture. The company didn't want ideas being spread to competitors, so it tightly guarded research and development.

Robert Shanebrook, a former employee who worked for more than 30 years in photographic film, "touched every camera that went to the moon" and authored the only book that describes the entire process of Kodak's filmmaking, says that if Kodak had to transport an emulsion formula for a film process to another manufacturing plant, management would separate the formula into two packages and carry each half on different routes bound for the same location. That wasn't secure enough, so each group had its own alphanumeric labels for components in the package.

"This confidentiality was necessary," says Shanebrook, who worked and remains friends with Sasson. "Kodak had spent literally billions of dollars perfecting silver halide film manufacturing process technology starting in 1880. In some cases parts per million and even parts per billion of material added to photographic emulsion can have a dramatic influence on a film's performance."

Larry Matteson, a former senior vice-president at Kodak and now a professor at the University of Rochester's business school, says a reckless dive into the digital space had its drawbacks.

For starters, it was difficult for management to justify a transition to the 3% to 4% margins of a consumer electronics business when it had been producing 70%-to-80% profit margins from photographic film sales for 100 years.

Second, Kodak's earliest digital cameras were expensive, which meant that the only consumers were the government or large corporations that could afford the $15,000 to $25,000 price tag in the 1980s and early 1990s.

5 of 15

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $126.44 0.00%
BBRY $7.96 0.00%
EMN $80.19 0.00%
FB $87.28 0.00%
GOOG $523.40 0.00%

Markets

DOW 17,730.11 -27.80 -0.16%
S&P 500 2,076.78 -0.64 -0.03%
NASDAQ 5,009.2140 -3.9090 -0.08%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs