Eastman Kodak

Type Traded as Industry Founded Founder(s) Headquarters Area served

Public OTCQB: EKDKQ

Digital imaging Photography

1889[1] George Eastman Rochester, New York, United States Worldwide

Antonio M. Perez
(Chairman and CEO)

Key people

Philip J. Faraci (President and COO)

Products Revenue Operating income Net income Total assets Total equity Employees Website

Photographic materials and equipment US$ 7.187 billion (2010)[2] US$ -561 million (2010)[2] US$ -687 million (2010)[2] US$ 6.239 billion (2010)[2] US$ -1.075 billion (2010)[2] 18,800 (2010)[2] www.kodak.com

Eastman Kodak Company (OTC Markets Group: EKDKQ), commonly known as Kodak, is a multinational imaging and photographic equipment, materials and services company headquartered in Rochester, New York, United States and incorporated in New Jersey.[3] Its history goes back to 1889 when it was founded by George Eastman. Kodak is best known for its wide range of photographic film products. During most of the 20th century Kodak held a dominant position in photographic film, and in 1976 had a 90% market share of photographic film sales in the United States. The company's ubiquity was such that its tagline "Kodak moment" entered common lexicon as a personal event that demanded to be recorded for posterity.[4]

Beginning in the late 1990s, Kodak struggled financially as a result of the decline in sales of photographic film, and 2007 was the most recent year in which the company made a profit.[5] As part of its turnaround strategy, Kodak has focused on digital photography and digital printing. In the late 2000s, Kodak also turned to aggressive patent litigation in order to generate revenue.[6][7] On January 19, 2012, Kodak filed for Chapter 11 bankruptcy protection and obtained a $950 million, 18-month credit facility from Citigroup to enable it to continue trading.[8][9][10]

Name
The letter "K" was a favorite of Eastman's; he is quoted as saying, "it seems a strong, incisive sort of letter." [11] He and his mother devised the name Kodak with an Anagrams set. Eastman said that there were three principal concepts he used in creating the name: it should be short; one cannot mispronounce it, and it could not resemble anything or be associated with anything but Kodak.[12] It has also been suggested that "Kodak" originated from the suggestion of David Houston, a fellow photographic inventor who held the patents to several roll film camera concepts that he later sold to Eastman.[12] Houston, who started receiving patents in 1881, was said to have chosen "Nodak" as a nickname of his home state, North Dakota (NoDak).[13][14] This is contested by other historians, however, who cite that Kodak was trademarked prior to Eastman buying Houston's patents.[15]

History
The Kodak factory and main office in Rochester, circa 1910. From the company's founding by George Eastman in 1889, Kodak followed the "razor-blade strategy" of selling inexpensive cameras and making large margins from consumables film, chemicals and paper. As late as 1976, Kodak commanded 90% of film sales and 85% of camera sales in the U.S., according to a 2005 case study for Harvard Business School. However, these seemingly unassailable competitive positions fostered Kodak's unimaginative executive culture. In May 1995, Kodak filed a petition with the US Commerce Department under section 301 of the Commerce Act arguing that its poor performance in the Japanese market was a direct result of unfair practices adopted by Fuji. The complaint was lodged by the United States with the World Trade Organization. [16] However on January 30, 1998, the WTO announced a "sweeping rejection of Kodak's complaints" about the film market in Japan. Kodak's financial results for the year ending December 1997 showed that company's revenues dropped from $15.97 billion in 1996 to $14.36 billion in 1997, a fall of more than 10%; their net earnings went from $1.29 billion to just $5 million for the same period. Kodak's market share plunged from 80.1% to 74.7% in the United States, a one year drop of five percentage points that had observers suggesting that Kodak was slow to react to changes and underestimated its rivals.[17][18][19][19]

Shift to digital

The Kodak logo from 1987 to 2006. In the 1990s, Kodak planned a decade-long journey to move to digital technology. CEO George M. C. Fisher reached out to Microsoft and other new consumer merchandisers. Apple's pioneering QuickTake consumer digital cameras, introduced in 1994, had the Apple label but they were actually produced by Kodak. Overall, though, there was little implementation of the new digital strategy. Kodak's core business faced no pressure from competing technologies, and as Kodak executives could not fathom a world without traditional film there was little incentive to deviate from that course. However consumers gradually switched to the digital offering from companies such as Sony. In 2001 film sales dropped, which was attributed by Kodak to the financial shocks preceeding the September 11 attacks. Executives hoped that Kodak might be able to slow the shift to digital through aggressive marketing.[21] Under Fisher's successor as CEO, Daniel Carp, Kodak made its move in the digital camera market, with its EasyShare family of digital cameras. Kodak spent tremendous resources studying customer behavior, finding out that women in particular loved taking digital photos but were frustrated in moving them to their computers. This key unmet consumer need became a major opportunity. Once Kodak got its product development machine started, it released model after model offering consumers top-quality cameras at reasonable prices that made it easy to share photos with friends and family members via their PCs. One of their key innovations was a printer dock, where consumers could insert their cameras into this compact device, press a button, and watch their photos roll out. By 2005, Kodak ranked No. 1 in the U.S. in digital camera sales that surged 40% to $5.7 billion.[21] Also an ever-smaller percentage of digital pictures were being taken on dedicated digital cameras, being gradually displaced in the late 2000s by cameras on cellphones, smartphones, and tablets.

Products and services

Current
Consumer inkjet printers and ink cartridges

Kodak entered into consumer inkjet photo printers in a joint venture with manufacturer Lexmark in 1999 with the Kodak Personal Picture Maker. In February 2007, Kodak re-entered the market with a new product line of All-In-One (AiO) inkjet printers that employ several technologies marketed as Kodacolor Technology. Advertising emphasizes low price for ink cartridges rather than for the printers themselves. Digital cameras and video cameras Main articles: Kodak DCS and Kodak EasyShare

A Kodak Easyshare Z1015 IS Digital Camera Kodak currently produces a wide range of digital cameras and video cameras. Many of Kodak's early compact digital cameras were designed and built by Chinon Industries, a Japanese camera manufacturer. In 2004 Kodak Japan acquired Chinon and many of its engineers and designers joined Kodak Japan. The Kodak DCS series of digital single-lens reflex cameras and digital camera backs were released by Kodak in the 1990s and 2000s, and discontinued in 2005. They were based on existing 35mm film SLRs from Nikon and Canon and the range included the original Kodak DCS, the first commercially-available digital SLR. In July 2006 Kodak announced that Flextronics would manufacture and help design its digital cameras. ] Digital picture frames Kodak first launched the Kodak Smart Picture Frame on the QVC shopping channel in the fourth quarter of 2000, when the majority of consumers did not know about or understand this new digital photo frame category. Kodak's Smart Frame was designed by Weave Innovations and licensed to Kodak with an exclusive relationship with Weave's StoryBox online photo network.[67] Smart Frame owners connected to the network via an analog telephone connection built into the frame. The frame was configured to default connect at 2 a.m. to download new pictures from the Story Box network. The other option to load images onto the frame was via the CompactFlash port. Document imaging Kodak provides document imaging solutions. Historically this industry began when George Eastman partnered with banks to image checks in the 1920s. Through the development of microfilm technology, Eastman Kodak was able to provide business and government with a solution for long term document storage. Document imaging was one of the first imaging

solutions to move to "digital imaging" technology. Kodak manufactured the first digital document scanners for high speed document imaging. Today Kodak has a full line of document scanners providing imaging solutions for banking, finance, insurance, healthcare and other vertical industries. Kodak also provides associated document capture software and business process services. Eastman Kodak acquired the Bowe Bell & Howell scanner division in September 2009. Flexo printing Kodak designs and manufactures products for flexography printing. Its Flexcel line of flexo printing systems allow label printers to produce their own digital plates for customized flexo printing and flexible printed packaging. Image sensors As part of its move toward higher end products, Kodak announced on September 15, 2006 that the new Leica M8 camera incorporates Kodak's KAF-10500 image sensor. This was the second recent partnership between Kodak and the German optical manufacturer. Kodak Gallery In June 2001, Kodak purchased the photo-developing website Ofoto, later re-named Kodak Gallery. The website enables users to upload their photos into albums, publish them into prints, and create mousepads, calendars, etc. Motion picture and TV production The Kodak company holds a vital role in the invention and development of the motion picture industry. Many cinema and TV productions are shot on Kodak film stocks. The company helped set the standard of 35 mm film, and introduced the 16 mm film format for home movie use and lower budget film productions. The home market-oriented 8 mm and Super 8 formats were also developed by Kodak. Kodak also entered the professional television production video tape market, briefly in the mid 1980s, under the product portfolio name of Eastman Professional Video Tape Products. In 1990, Kodak launched a Worldwide Student Program working with university faculty throughout the world to help nurture the future generation of film-makers. Kodak formed Educational Advisory Councils in the US, Europe and Asia made up of Deans and Chairs of some of the most prestigious film schools throughout the world to help guide the development of their program. . Photographic film and paper Kodak continues to produce specialty films and film for newer and more popular consumer formats, while it has also discontinued the manufacture of film in older and less popular formats. Kodak is a leading producer of silver halide (AgX) paper used for printing from film and digital images. Minilabs located in retail stores and larger central photo lab operations (CLOs) use silver halide paper for photo printing. In 2005 Kodak announced it would stop producing black-andTechnical support and on-site service Aside from technical phone support for their products, Kodak offers onsite service for other devices such as document scanners, data storage systems (optical, tape, and disk), printers, inkjet printing presses, microfilm/microfiche equipment, photo kiosks and photocopiers, for which they dispatch technicians who make repairs in the field. Other

Kodak markets Picture CDs and other photo products such as calendars, photo books and photo enlargements through retail partners such as CVS, Walmart and Target and through its Kodak Gallery online service, formerly known as Ofoto. Still film cameras On January 13, 2004, Kodak announced it would stop marketing traditional still film cameras (excluding disposable cameras) in the United States, Canada and Western Europe, but would continue to sell film cameras in India, Latin America, Eastern Europe and Chin By the end of 2005, Kodak ceased manufacturing cameras that used the Advanced Photo System. Kodak licensed the manufacture of Kodak branded cameras to Vivitar in 2005 and 2006. After 2007 Kodak did not license the manufacture of any film camera with the Kodak name. Instant cameras After losing a patent battle with Polaroid Corporation, Kodak left the instant camera business on January 9, 1986. The Kodak instant camera included models known as the Kodamatic and the Colorburst. Polaroid was awarded damages in the patent trial in the amount of US $909,457,567.00, a record at the time. (Polaroid Corp. v. Eastman Kodak Co., U.S. District Court District of Massachusetts, decided October 12, 1990, case no. 76-1634-MA. Published in the U.S. Patent Quarterly as 16 USPQ2d 1481). See also the following cases: Polaroid Corp. v. Eastman Kodak Co., 641 F.Supp. 828 [228 USPQ 305] (D. Mass. 1985), stay denied, 833 F.2d 930 [5 USPQ2d 1080] (Fed. Cir.), aff'd, 789 F.2d 1556 [229 USPQ 561] (Fed. Cir.), cert. denied, 479 U.S. 850 (1986). Kodak was the exclusive supplier of negatives for Polaroid cameras from 1963 until 1969, when Polaroid chose to manufacture its own instant film.