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Sell patents, bit a massive loan, or close up shop?

Poor Kodak has taken a beating since the advent of digital photography. Few consumers buy film anymore and Kodak’s line of digital cameras aren’t even close to setting sales records. Kodak is facing a bleak future and has previously stated that it might be forced to close up shop as early as this year if things don't change.
Kodak is also facing growing personnel losses within the company. The firm has announced the loss of a third member from its board of directors in the last week. The latest loss is Laura Tyson who resigned her position on the board of Kodak Thursday. The resignation was confirmed in a SEC filing that Kodak made on Friday.
Tyson is a professor at the Walter A. Haas School of Business at the University of California, Berkeley. Tyson is also a member of President Obama's Economic Recovery Advisory Board and advised President Clinton when he was in office.
Kodak is in such dire financial straits that the firm is looking at possibly selling off patents it holds to stay solvent. It has been estimated that the patents Kodak holds are worth five times the company's current market cap.
The other two directors that left Kodak last week include Adam Clammer and Herald Chen. The two directors were both from a private equity firm called KKR & Co and had been on the board since 2009. 
Reuters reports that Kodak had also warned that it might have to raise $500 million in new debt in lieu of selling patents to stay solvent. Kodak hasn't turned an annual profit since 1997.

Source: Reuters

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A shame
By MonkeyPaw on 1/2/2012 10:54:54 AM , Rating: 2
It's sad, really. My first real digicam was a DX6490 that I paid $300 for back in 2004. That camera still takes great pictures to this day. I just finally replaced it with one that takes HD videos (had a baby). Problem was that Kodak didn't offer what I was looking for, so I had to go with a Sony. I gave the Kodak to my dad, so hopefully that old boy still has more good pictures left in it.

RE: A shame
By GreenEnvt on 1/2/2012 11:58:58 AM , Rating: 2
We had a Kodak Z1012is a couple years ago, loved that one.
10MP, big zoom, and pretty quick.
It got stolen and we haven't found another one we've been as happy with since. Currently using a Nokia L110, which is ok, but it's stupid auto modes assume incorrectly very often, which makes for very blurry shots in anything but bright light if the flash doesn't fire.

RE: A shame
By Solandri on 1/2/2012 2:41:53 PM , Rating: 3
Kodak's forte has never been cameras. Even in the film days, the only real camera hits Kodak had were early 110 film cameras (because they were the only ones making them when they introduced the film), disc film cameras (which took atrocious pictures, but most people didn't care), and disposables.

None of these translate well into digital cameras. They were all about making a cheap camera body (both in cost and construction) to increase the number of people buying consumables from from (film, and if you're old enough to remember, disposable flashbulbs). With digital, there are no consumables, so there's no way to sell cheap camera bodies as a loss-leader. Their only advantage is lower price, which just isn't enough when digital camera units for webcams and phones have gotten below $10 in price. Kodak is like an inkjet printer company trying to compete in a world where ink has become free and laser printers have come down to about $10 in price.

Their forte has always been film. They were able to leverage it for a while into digital sensors. They started researching those way back in the 1970s, and owned most of the patents on the technology. But those patents are expiring, and Kodak just isn't an electronics R&D company. Diversified companies like Canon and Sony are finding themselves much better-positioned for the digital camera era. Kodak simply doesn't have the electronics and silicon fabbing experience to compete.

My first camera was a Kodak 110. Used it for years as a kid until it fell out of my pocket into a pool. But the writing is on the wall. The best they can hope for is to be acquired by a company with a strong electronics presence. I suppose selling off the patents would accomplish the same thing, albeit losing the Kodak name in the process.

RE: A shame
By Cypherdude1 on 1/2/2012 7:14:01 PM , Rating: 2
One thing I like about Kodak is they aren't greedy when it comes to their inkjet printers:

It only costs $28 to buy a replacement pair of black and color cartridges:

Because it was so expensive, $60, to replace the pair of carts for my now dead Epson Stylus Color 980, I had to use cheap clone carts. There's no way I was going to pay $60 for Epson's carts especially when you lose 5% every time you run it through a cleaning cycle. Unfortunately, those cheaper clone carts had impurities in them which clogged the delicate inkjets and I could not repair it with special cleaning solution. I ended up switching to a Brother laser printer. I will never use another expensive to run inkjet printer again.

It's too bad Kodak is having these problems and may close. I hope they don't because people can really use an inexpensive inkjet printer.

RE: A shame
By Black1969ta on 1/3/2012 12:49:25 AM , Rating: 2
I had an Epson workforce 600 just a couple of years ago, never used any other carts other than Official Epson Carts. Problem was that we used it irregularly and it would clog between uses, but by the time we used it then needed it again, it would consume at least one of the Carts. Then the Cyan clogged completely and would not print. I replaced it with an HP OfficeJet 8500A Premium. We have had it for 4-5 Months now and so far had no trouble with it.(Knock on Wood)

RE: A shame
By Samus on 1/3/2012 7:30:51 PM , Rating: 2
Epson and Canon commonly have those issues with the head units clogging over time when sparingly used. HP units that use a print head have a cycling system that keeps them clean but uses ink to do so. The advantage of print heads is they generally increase ink usage efficiency by allowing for larger ink capacity.

I've always found it hard to consider any printer other than HP. Luckily, their drivers (the worst part of any HP product) are finally improving and it doesn't take 30 minutes to install a printer anymore.

Back on topic, this is sad about Kodak. One of my first digicams in the early 00's was a Kodak and I used it for years to post pictures on eBay simply because of its superior Macro mode. No camera I've owned since took such close-up pictures. You could easily read memory module markings without blur or over-exposure from the flash.

RE: A shame
By Jeffk464 on 1/3/2012 5:48:53 PM , Rating: 2
Hmm, kodak and sony are in the same boat in my opinion. Go with Cannon first choice and second nikon. That being said I have a kodak and it works well for just snapping pics.

By EricMartello on 1/2/2012 5:02:46 PM , Rating: 2
What next? An article telling us that there is less demand for printed media?

Kodak has had PLENTY of time to get in the game, invest into or buy necessary resources to go digital AND promote it effectively.

Their digital cameras have always been middle-of-the-road in terms of quality. My first digital camera was a kodak back in 1999. It took muddy pictures and was big, but at the time it was decent and affordable compared to the few other offerings on the market.

Since kodak has always taken the quantity over quality approach to cameras, they could have developed a sensor for cellphones and licensed it to cellphone manufacturers. Cellphone makers could then add that bullet point on their phones' marketing material and kodak would be raking in licensing fees without having to manufacture anything.

Seems to me all they did was offer mid to low quality digicams with zero marketing effort behind them...and now they're on their way out.

By DoctorBeer on 1/2/2012 5:26:11 PM , Rating: 2
This is true. I can't remember the last time I've seen an ad for a Kodak.

Anyone with a brain could of seen that digital was going to take over... Well maybe we now know who didn't get the memo. ;D

RIP Kodak!

By christojojo on 1/2/2012 9:33:22 PM , Rating: 2
Kodak has been slow and sluggish for at least two decades. Living in Buffalo and not far away from Kodak.s home of Rochester NY. I have followed them hoping they would turn around since my early Twenties. It is sad actually.
I remember asking my ex-brother-in-law, who worked there at the time, about why they are so bad at turning around. His reply was it was all bureaucracy. He quit that place out of frustration for a job with less pay but better environment.
Seeing those three leave makes me think of rats leaving the ship. If they left I would not be surprised that the company has been pilfered already.

By Jeffk464 on 1/3/2012 5:52:20 PM , Rating: 2
Like someone said before kodak was never a strong camera company. The best cameras still come from camera companies, not electronic companies.

Kodak's Failure
By jonathansalembaskin on 1/2/2012 1:28:04 PM , Rating: 2
I think it's too easy to blame 'digital' as the cause of Kodak's failure...they saw it coming long ago and had reasonable strategies to deal with it. They just couldn't market their way out of a paper bag. Kodak did it to themselves. I wrote an essay analyzing it at DIM BULB if you're interested:

Don't totally blame the board!
By whereisusa on 1/11/2012 3:04:52 PM , Rating: 2
No surprise the board is now jumping ship. What happened is Perez and Faraci bunkered themselves in by hand picking the board of directors, and strategically made Perez the Chairman of the Board, a sinister strategy in my opinion. C’mon, really? Who let’s this happen? Do you think a CEO who is Chairman of the Board will put anyone on the board that might threaten him or even debate him? So now, one by one the members of the board are realizing they were played like pawns. So once they were concrete bunkered, Perez and Faraci were free and clear make business decisions that are/were clearly compensation driven for themselves and NOT for the long term viability of Kodak traditions and Kodak long term health and Kodak employees. DISGRACEFUL! Their agenda clearly seems to have been to eliminate every traditional Kodak business line by ignoring every “Kodak picture” like product or division, then selling it off. Their focus has been on inkjet commercial printing, sorry that just doesn’t fit the Kodak logo, and that’s the philosophy that has death spiraled Kodak, plain and simple. Focusing on an arena that has and will do nothing but decline, it’s obvious they have blinders on and will never embrace where Kodak should/could have been headed.

Even if the board of directors (those that are left) came out of their comas or grew some cohonas and did what they should have done 6 or 7 years ago (do they know the function that the board of directors is supposed to do?), it’s obviously too late, the damage is irreversible.

And now the “board of directors elected Laura Quatela” as a new Kodak President. Translation, Perez and Faraci appointing a puppet in a dire attempt to make Wall Street think something has changed and extend their lucrative salaries for who knows how much longer.

WiFi or 3G
By drycrust3 on 1/2/12, Rating: -1
RE: WiFi or 3G
By EricMartello on 1/2/2012 5:19:10 PM , Rating: 2
The big problem with a digital camera is you need a computer to get your pictures onto Flickr and your video onto Youtube.

You are right about saying that Kodak should have been going for the cellphone camera market, but you're missing the point and misinterpreting what you see there on Flickr.

The iphone is not a popular camera; it's a popular communications device that has the ability to take pictures. In other words, if it ONLY took pictures and was just as easy to use, it would not have gained its popularity. If the samsung galaxy became the most popular phone, it would probably start replacing the iphone as the "most popular camera" based on that flickr graph.

Since smartphones can take pictures and are REQUIRED to have a data plan, people are more likely to upload the pics they take. The iphone is the most popular smartphone for now, so that's why it's topping the graph.

Cameras with integrated wifi have been tried before - they never caught on. I believe there still are some cameras on the market that do offer WiFi...but a camera with 3G would be a bad idea. Who is going to want to pay a monthly fee for a camera alone? Very few people would.

The reason is simple. If you are using a camera, you care about quality. If you just want to take snapshots then something like an iphone is good enough...but if you're actually interested in getting creative photographic results you are going to need to get into DSLR type cameras...and most people who make that decision don't care about 'consumer' features like the "wifi button" or "email to grandma" feature.

Kodak's best play would have been to develop/purchase lens & sensor tech, then license said tech and branding to cellphone makers...similar to the way Zeiss licensed their brand to Logitech for some of their webcams.

RE: WiFi or 3G
By DoctorBeer on 1/2/2012 5:20:58 PM , Rating: 1
Iphone != DSLR

Nice troll attempt though. Gave me a giggle.

RE: WiFi or 3G
By rawlic on 1/3/2012 1:06:38 AM , Rating: 2
Actually, you're missing the point. What he was saying is that most people on Flickr are posting photos taken on their Iphones, and that if Kodak could tack a phone onto their existing cameras they might be okay. That probably won't work (see GarminPhone), but previous comments about branding cameras for phones are a possibility that while not easy, is definitely cheap for Kodak. Make a package of a decent lens+sensor+LED Flash and offer it to phone OEMs. Not a ton of development cost, and it puts the Kodak name back out there a bit.

Considering the current state of cell phone camera quality, if they actually make something cheap enough for OEMs to consider and quality enough that there's a visible quality difference it could bring the Kodak name back into discussion. Pack it with a touch interface photo touchup (red eye reduction, some quick photo effects like paper camera or photo effects pro) and suddenly manufacturers can say "but does it have a Kodak camera?" because there will be perceived value in the package.

And as far as troll posts, where did DSLRs come into this? As far as DSLRs go, if you aren't Canon or Nikon there's not much space to say anything. If the discussion is about methods for Kodak to stay afloat, do you think dropping the kind of money to re-enter that market segment is worth it? R&D costs are going to be astronomical for that.

Not good
By bug77 on 1/2/12, Rating: -1
RE: Not good
By CarbonJoe on 1/2/2012 5:04:26 PM , Rating: 2
Nice to see presidents picking advisers from the "winning" camp.

Charlie Sheen is now a presidential advisor?

RE: Not good
By Black1969ta on 1/3/2012 12:52:18 AM , Rating: 2

"I'd be pissed too, but you didn't have to go all Minority Report on his ass!" -- Jon Stewart on police raiding Gizmodo editor Jason Chen's home

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