Kodak's first digital camera technology had outpaced the other consumer electronic technologies needed to make it work. Digital photography requires a storage system. The images are viewed on a screen, and in order to display those images, the data is pulled from a memory card, hard drive or cloud. Even if the lesser quality of digital images compared to film at the time is discounted, there were few computers in the 1980s and early-1990s with the capacity to store the hundreds and thousands of photos that consumers snapped and placed into bounded-albums.
"The price of storage is down now to about $1 a megabyte. I remember when I retired I bought a ... one gig card for $50, and now they're about $1 a gigabyte. So that 50 to 1 reduction in price of storage has become a big factor in the demise of film," says Shanebrook through his white beard, as his grey eyes peer through his double-bridged wire glasses.
Even if Kodak wanted to jump into the consumer electronic camera market, costs made it entirely unprofitable.
Digital became more affordable in the late 90s, and Kodak eventually made a huge push in the digital camera space. Matteson points out that by 2003, Kodak held the largest market share in electronic cameras, but overall revenue still only rose 0.58% that year. (Kodak discontinued the sale of digital cameras in 2012, and contracted for supply of cameras from third parties Asia Optical and Altek, Kodak spokesman Veronda says.)So, did Kodak act too slowly? Even if Kodak had pivoted earlier to dominate the point-and-shoot digital camera boom, the company then would have needed to anticipate the rise of high resolution camera phones. Kodak's leadership understood what was happening, but it was only mismanagement in the sense that the company didn't roll out the next big idea, says Shanebrook. "They realized they've been making the same crap for 119 years at the same site," says Shanebrook. "Tragic is probably overstating [Kodak's bankruptcy]. It's a technological change." The company didn't foresee the smart camera in the '80s and '90s, says Matteson, but Kodak R&D personnel predicted the emergence of the smart camera by 2000. Twelve years later, Eastman Kodak filed for bankruptcy.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV