Dunvegan Thought Spot

In the research The Dunvegan Group conducts to support our CCR (Customer Care & Retention) programs, we discover articles, blog posts and videos which, although not directly related to our work, are thought provoking or concern matters you may want to think about.  ‘Thought Spot’ covers a broad range of subjects.

The posts in ‘Thought Spot’ are selected by Olev Wain, Ph.D., VP of The Dunvegan Group. 

We welcome your feedback!


 

 

Kodak Invented The Technology That Destroyed It

Many people continue to believe that Kodak sat by idly as the digital camera destroyed its film business. This was not the case.

Kodak was very active in the research and development of digital imaging technology.

Writing in the July 2016 issue of Harvard Business Review, Scott Anthony points out that:

“The first prototype of a digital camera was created in 1975 by Steve Sasson, an engineer working for … Kodak. The camera was as big as a toaster, took 20 seconds to take an image, had low quality, and required complicated connections to a television to view, but it clearly had massive disruptive potential.”

David Usborne writing on independent.co.uk observed that:

“A vice-president left [Kodak] in 1993 because even then he couldn't persuade it to manufacture and market a digital camera. ‘We developed the world's first consumer digital camera but we could not get approval to launch or sell it because of fear of the effects on the film market."

To a degree this was understandable since the profit on film was 70 cents on the dollar; such margins could not be achieved with digital cameras.

Then, in 1994 Apple launched ‘Quicktake’ one of the first digital consumer cameras. Apple did not manufacture it . . . Kodak did!

Meanwhile, Kodak continued to design and manufacture high end digital cameras and other imaging equipment, not realizing the mass market potential for consumer digital cameras.

According to Wikipedia (edited):

In 1999 Kodak had a 27% market-leading share in digital camera sales.

In 2001 Kodak held the No. 2 spot in U.S. digital camera sales (behind Sony)  but it lost $60 on every camera sold.

By 2010 it held 7% share, in seventh place behind Canon, Sony, Nikon and others.

Despite the high growth, Kodak failed to anticipate how fast digital cameras became commodities, with low profit margins, as more companies entered the market in the mid-2000s.

Kodak’s digital cameras soon became undercut by Asian competitors that could produce their offerings more cheaply.

Now an ever-smaller percentage of digital pictures are being taken on dedicated digital cameras, being gradually displaced in the late 2000s by cameras on cellphones, smartphones and tablets. 

So you see, Kodak was not blind to the digital revolution but actually participated in it. Trying to maintain its film business prevented the company from a more aggressive move into the consumer digital camera arena.

Your thoughts?

Image courtesy of bpablo at FreeDigitalPhotos.net

Relevant links:

https://hbr.org/2016/07/kodaks-downfall-wasnt-about-technology

http://www.independent.co.uk/news/business/analysis-and-features/the-moment-it-all-went-wrong-for-kodak-6292212.html

https://en.wikipedia.org/wiki/Kodak#Shift_to_digital

http://sloanreview.mit.edu/article/the-real-lessons-from-kodaks-decline/

Return to list

0 Comments

    Leave a Reply