Kodak’s Hail Mary

I always get a kick when a long-storied company which is in decline tries to hook onto the latest, hottest market, thinking, “we will get into this market, and with our amazing brand, we will knock it out of the park!” This is the business equivalent of a Hail Mary pass… while throwing it off to the sides and into the stands, rather than down the field towards the goal line.

And now, Kodak is doing it.

Kodak has been around for a very long time. In many ways it was the mother of all consumer photography, dominating in cameras, film and photographic paper (I always wondered why there isn’t a special word for that) for decades. As a senior in high school, I was responsible for all photography; a friend and I set up a darkroom in his basement, and together we developed thousands of pictures from Kodak film via Kodak chemicals to Kodak paper. I even managed to get Kodak Canada to donate all of our film, paper and chemicals!

But Kodak has been in decline for years. Despite an engineer at Kodak having invented the digital camera way back in 1975, Kodak squashed it, never seriously bringing it to market until very late in the game. It simply was too threatening to their existing business, and they were unwilling to cannibalize themselves (apparently preferring that others did so instead).

By now, of course, the entire camera market, including digital, is in serious trouble, thanks to smartphones with cameras. Whereas cameras used to be a very large industry in and of themselves, today, for the overwhelming majority of people, a camera is just one feature on the phone they carry around anyways.

The inevitable result is that Kodak has been in serious decline for years. According to Kodak’s latest financial report, over a period of 4 years, their revenue declined from $6.2BN to $4.4BN to $3.6BN to $2.7BN to $2.3BN into FY2013. Their business has imploded by 62.9% in just 4 years. “Imploded” may be too gentle a word; black holes don’t collapse this quickly.

The irony, of course, is that photography isn’t disappearing; people are taking far more pictures than ever. However, they are doing it from their smartphones, rather than dedicated cameras, and putting them on screens, rather than Kodak paper.

So, of course, Kodak is convinced that merging the Kodak photography brand with a smartphone is the perfect way to capture the hearts and minds (and wallets) of consumers.  Right now, only 2 brands matter in phones: Apple and Google/Android. And in Android, only two qualities matter:

  • Who can make the best/sexiest/highest end smartphone that competes with Apple? Historically that has been Samsung, but Motorola with its X, Xiaomi and maybe OnePlus are moving in.
  • Who can make the cheapest smartphone that is good enough all around? Motorola (Moto E and Moto G), and lower-end Xiaomi are taking this one over too.

What does Kodak bring to the party? Camera and development knowledge? In all seriousness, who is going to buy a smartphone because Kodak is on the label? I suspect almost no one.

A more interesting question is, who in the world thought people actually would? This Hail Mary is going off into the stands.

About Avi Deitcher

Avi Deitcher is a technology business consultant who lives to dramatically improve fast-moving and fast-growing companies. He writes regularly on this blog, and can be reached via Facebook, Twitter and avi@atomicinc.com.
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