Friday, January 13, 2012

Missing the "Kodak Moment"

Kodak have made the headlines recently for all the wrong reasons, with last ditch attempts to raise cash by selling patents unlikely to halt impending bankruptcy. It is ironic that Kodak’s problems are largely down to a failure to adapt to new trends despite founder George Eastman inventing the roll film and the modern company inventing the digital camera in 1975.

What went wrong for Kodak?

It is reported that in 1976, Kodak had a 90% share of film sales and 85% share of camera sales. Despite inventing the digital camera around the same time, the company was complacent, revelling in large profit margins on film and paper and not recognising that the future of photography was up for grabs. Early digital cameras were met with disdain from the market as they were expensive and bulky; Kodak did not pursue the mass market of digital photography until the 1990s. With the surge in popularity of digital cameras in the early 2000s, Kodak retained a large market share thanks to strong reputation and innovative add-ons such as sharing software and photo printers. In 2001, Kodak was the No. 2 seller of digital cameras. By 2007, they had slipped to No. 4 with a market share of 9.6%. That’s a long way from the 85% the company enjoyed in 1976!

Now, in 2012, it looks like Kodak is set to go bankrupt with all time low shares and low sales. So why has Kodak slipped from the world leader in photography to a company hanging on for dear life? What would the founder George Eastman think if he heard the news today?

Failure to meet demand

Since the advent of digital cameras they have been getting smaller, lighter, and cheaper. Kodak’s desire to remain at the forefront of this business while selling outdated models at unreasonable prices did not work. They had not prepared for the low prices of cameras and so ended up making a loss just to stay in the market – hardly the best business strategy.

The reason for Kodak’s early success was that George Eastman revolutionised photography by developing a replacement for plates. Having investing in bulky web-plate photographic technology   he desired something more portable that could be sold to the mass market by first developing dry-plates and then roll film. The invention of the roll film camera meant that anybody could take photographs on the move without carrying around bulky equipment or breaking the bank.

The modern day Kodak Company, blinded by high profits and large market share did not recognise that in the 21st century, photography was to become even more portable and inexpensive and are suffering heavily.

The next step for photography

Kodak may just be the first of many photography businesses to go under. It has been reported that compact digital camera sales have declined rapidly as people are using their smartphone cameras instead. The compact camera is losing its place in the market as a cheap ‘point and click’ for photos on the move as smartphone cameras become more sophisticated and mean that budding photographers on the go only need one device in their pocket. Mobile cameras won’t be replacing high end DSLR photography any time soon but people are starting to wonder why they should spend £50-£200 on a pocket digital camera when they are already carrying around more expensive device that often does more. Many phones are now designed to take photos in one or two button presses and there are a range of apps available to make mobile photography more impressive and to then share it online instantly – no more messing around with USB cables and SD cards.

What do you think is the future of photography? 
This post was written by accredited PRINCE2 providers Silicon Beach Training, Brighton based IT and Business training specialists. In unsure financial times, many businesses are turning to Six Sigma as a popular method of streamlining operations. As well as our full range of Six Sigma Courses, we also (unlike Kodak) are preparing people for the future by providing Mobile Development Training, including iPhone App Development and Android App Development.