Sat, Feb 11, 2012 - Page 10 News List

Kodak to shutter camera business


Eastman Kodak Co, the inventor of the digital camera, plans to get out of that business in the first half of the year as the bankrupt company looks to cut costs.

The decision to stop selling digital cameras along with pocket video cameras and digital picture frames marks the end of an era for Kodak, which also invented the handheld camera.

The company was one of the biggest corporate casualties of the digital age as it failed to quickly embrace modern technologies, such as digital photography, which it invented in 1975.

Kodak, which filed for bankruptcy protection last month, said on Thursday that getting out of cameras would result in “significant” job losses. Most of the 400 people in that business are based in Rochester, New York, and work in research and development and marketing.

Instead of designing its own cameras, Kodak will now try to license its brand to other camera makers, several of which have already expressed “significant interest,” spokesman Christopher Veronda said.

Kodak, which as recently as 2006 was one of the top three digital camera makers in the world, will stick with its desktop printer business, on which it has focused more recently.

“The printer initiative took over [in the past decade], and they took their eye off the ball in the camera and camcorder space,” IDC analyst Christopher Chute said.

The company, which began in 1880, also invented digital cameras with WiFi connections and touch-screens, as well as docking stations that made it easy to transfer photos to computers, Chute said.

These were among the products that gave Kodak a 10 percent market share in 2006, behind Canon and Sony Corp. By 2010, it had dropped to seventh place, behind rivals like Nikon and Samsung Electronics Co, according to IDC.

However, as the quality of digital cameras in cellphones improved, the relevance of stand-alone cameras became somewhat limited to the higher-end market, where Kodak did not compete in recent years.

The company will take a charge of about US$30 million to leave the business. It expects the exit to generate more than US$100 million in annual operating savings.

The charge does not include additional costs that Kodak expects to incur for actions such as ending manufacturing contracts with overseas companies that make its products, Veronda said.

Kodak — which once employed more than 60,000 people — has not disclosed its employee numbers since the end of 2010, when it announced that it had a work force of 18,800. Today’s employee base is smaller than that, according to Veronda, who said the company would update the number soon.

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