Photography giant Kodak appears to be headed for Chapter 11 bankruptcy in coming weeks, leading people to ask the obvious questions “How?” and “Why?” to the long-standing company. One popular theory blames the rise in popularity of cameras built into cellphones as the culprit. John Paul Titlow of ReadWriteWeb argues photography was a specialized hobby in Kodak’s heyday, with the limitations of film cameras dictating they only be pulled out of the closet and used for special occasions. With cameras becoming an integral part of smartphones, Kodak is squeezed out as a provider of cameras for casual, everyday use.
An article in The Conversation counters Titlow’s findings with analysis of data from Flickr. Their website indicates only three percent of the photos uploaded are taken with smartphone cameras. Meanwhile, over half of Flickr’s photos are tagged as originating from Canon cameras and over a quarter of pictures come from Nikon cameras. Kodak cameras amount to only about six percent of the total.
Kodak lost their once-dominant position in the marketplace when they failed to anticipate the changes digital photography brought about. While Kodak may have thought they were doing the right thing by sticking with the consumer market versus focusing on professional-grade cameras, the market itself shifted, with casual users and hobbyists latching onto “prosumer” grade SLRs from the likes of Nikon and Canon in droves. The high-end pro users went digital and quit buying as much Kodak film. Other casual users decided to make do with their new smartphone as their only camera instead of buying another device to carry around.
Kodak’s most recent attempt to remain relevant was offering a line of color inkjet printers with less costly ink than the competition. This was a case of “too little, too late” when the trend in photography is now headed towards sharing photos online. Even the traditional holiday greeting card is quickly turning into a service you orders online, further reducing ink usage printing DYI greeting cards.
Clearly, Kodak holds a vast portfolio of valuable patents, some of which they’ll likely sell off as part of a restructuring plan. It’s too early to write Kodak off completely, but now the company needs to seriously think about which direction the business can go to successfully reinvent itself.
[…] appears to be a step in the right direction for Eastman Kodak, but as I alluded to in my earlier article on the subject, I think their long-term challenge involves creating new products or services to […]