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Kodak to phase out digital cameras, frames

Rochester Business Journal
February 9, 2012

Eastman Kodak Co. on Thursday said it plans to phase out its digital cameras, pocket video camera and digital picture frames business.

Kodak, which filed for bankruptcy on Jan. 19, said it is making the move as a result of its ongoing strategic review and effort to drive sustainable profitability through its most valuable business lines. It plans to phase out the business during the first half.

Kodak expects to achieve annual operating savings of more than $100 million after completing the phase out. Kodak expects to incur a charge related to separation benefits of approximately $30 million resulting from the exit of the business.

Kodak spokesman Christopher Veronda said there will be significant impacts among the 400 worldwide employees in the business, about 30 percent of whom work in Rochester.

The move was not unexpected as taking photos increasing has shifted to mobile devices.

The company instead plans to expand its brand licensing program, and seek licensees in those product categories.

“For some time, Kodak’s strategy has been to improve margins in the capture device business by narrowing our participation in terms of product portfolio, geographies and retail outlets. Today’s announcement is the logical extension of that process, given our analysis of the industry trends,” said Pradeep Jotwani, president of consumer businesses and chief marketing officer.

The company said Kodak it has contacted its retail partners, and is working to ensure an orderly transition. Kodak will continue to honor all related product warranties, and provide technical support and service for its cameras, pocket video cameras and digital picture frames, the company said.

“Businesses that are bleeding must be sold or shut,” said George Conboy, president of Brighton Securities.

He expects additional such moves by Kodak.
 
“Kodak made a camera for the general public the way Apple made an MP3 player for the general public. But for Kodak, cameras were nothing more than a way to sell film,” Conboy said. “With no more film to sell, Kodak has no more need for cameras.”

Kodak’s consumer business now will include online and retail-based photo printing, as well as desktop inkjet printing.

That includes retail-based photo kiosks and digital dry lab systems. Kodak said it has more than 100,000 kiosks and order stations for dry lab systems around the world. The consumer business also will include Kodak apps for Facebook, Kodak Gallery online digital photo products service and its camera accessories and batteries businesses, the company said.

The business also includes its traditional film capture and photographic paper business.

(c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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