updated 09:45 am EST, Thu February 9, 2012
Kodak to cut original businesses to stay alive
Kodak validated rumors and said Thursday that it would stop making what most consider its core products. It plans to shut down production of still cameras, pocket video cameras, and digital photo frames within the first half of this year. The shift would leave it to inkjet printers and other photo printing.
The company still intended to provide support for cameras orphaned by the decision.
Its cost-cutting would come in the face of its bankruptcy filing and was intended to shed over $100 million in costs per year as part of a restructuring. Kodak will take an up-front $30 million cost as part of the shift.
Ending cameras would come as the tail end of a series of strategic failures at Kodak. The company was slow to adapt to digital, initially trying to shelter its film camera business where Canon, Nikon, and others more openly embraced the new technology. By the time it arrived, it focused mostly on low-end cameras and was squeezed out.
Rather than improve its products, Kodak instead decided to base its income on suing other companies over patent disputes. Its finances reached a crisis when courts either denied or delayed its wins, leading it to start selling core businesses and even try to sell the patents it was using as weapons. Evemn in its current state, it has been trying new lawsuits as a last-ditch attempt to improve revenue.
For Kodak, the decision closes down the camera business that was at the heart of its work for nearly all of the 123 years since it was founded. Some have likened the rumored and now confirmed camera division selloff as akin to HP briefly toying with the idea of abandoning PCs, since it would remove the brand from what most associate with its core product.