Eastman Kodak, situated in Rochester, NY, pioneer of film photography and inventor of the famous “Brownie” — the first widely available photographic camera for amateurs — just announced that they will completely back out of the camera business. Despite never being really successful on the digital camera market, the brand name “Kodak” is associated with photography like no other.
After the continuous decline of their stock market value during the past couple years, this January Eastman Kodak finally had to declare Chapter 11 bankruptcy. Read more after the jump.
During the past years, Eastman Kodak has continually been struggling with their finances, which — despite all efforts at saving the company — finally led to bankruptcy. The story of Eastman Kodak’s decline is a long one, and is documented in detail at The Night Owl Trader. It is a story of mismanagement, wrong decisions and bad timing. It began with the invention of the digital camera, which ultimately led to the company’s demise: being focused on the film market, EK decided not to invest into digital photography out of fear this technology could have a negative impact on their film sales. The prognosis was correct, but the decision that followed it was fatal.
In recent months, Kodak’s cash reserves were decreasing rapidly. The company tried to raise new funds through selling off a large number of patents, but apparently found no buyer. They then sold off a number of subdivisions, some of which were the only remaining profitable parts of the company. But since the declared goal of EK’s CEO Antonio Perez was (or still is) to restructure the company to become specialized in digital print, the revenues were direly needed and the subdivisions sold no longer fitted the company’s profile. The third way in which EK tried to raise new funds was filing a series of patent-infringement lawsuits against former competitors. None of these attemps raised enough money to save the company, though.
According to the press release, by phasing out their “dedicated capture devices business”, Eastman Kodak hopes to achieve annual operating savings of more than $100 million. Customer support for any products affected by the sale will continue, though, Eastman Kodak assures. If these measures will ultimately help to restructure the company, or if they will turn out to have been another futile attempt at rescuing a business that is beyond rescue, remains to be seen.
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