15 January 2006
Recent announcements, including the roll-out of an updated logo, have drawn attention to the evolving digital strategy of Eastman Kodak Co., Rochester, N.Y. According to recent Newsweek article, "The decline of traditional cameras and film, and the explosive rise of digital photography, has sharply cut into sales and set its stock back 74 percent over the past five years.
Antonio Perez, 59, a veteran of Silicon Valley's Hewlett-Packard, joined the Rochester, N.Y.-based Kodak in 2003 and took over as CEO last June. In the past two years, Perez has slashed Kodak's U.S. manufacturing, announced plans to lay off 25,000 employees and doubled down on consumer electronics, digital printing and health-care imaging."
In the article, Perez noted the company is mid-way through its four-year restructuring, and now has his "second wind." Before he joined the company in 2003, Kodak needed a "new vision."
"You could sense that the majority of people in the organisation were in a desperate search for what was next," Perez said in the article. "Luckily we had been investing in digital, and we have the intellectual property and a strong brand.' This is not desperate, but if we don't [restructure the company] we will cease to exist.' That is what we kept saying to each other during that time."
Citing Kodak's digital heritage, Perez noted, "What we have done with digital cameras is use a piece of silicon instead of silver. We still have [the] same architecture we had before. With film we could only have one light path. Why can't we have more than one digital light sensor? And why use a flash? You needed it for film but you don't need it when you have light sensors that can see with a lot less light than your eye can. We have just carried on the limitations of the old architecture. That is why we're coming in with worldwide firsts-last year it was the first Wi-Fi camera and now the first dual-lens camera. We are the ultimate film company telling the world that film architecture is wrong for the digital space."
Also, in the Newsweek article, Perez doesn't rule out the possibility of splitting up or selling the company, although he doesn't feel "pressure" to do that "yet." Kodak also updated its logo last week, providing a more contemporary type treatment to its logo, which was last updated in 1987.
In other news, Motorola Inc., Schaumburg, Ill., and Kodak announced a 10-year global product, cross licensing, and marketing alliance intended to fulfill the promise of mobile imaging for the benefit of consumers. By incorporating Kodak's image science and system integration expertise with Motorola mobile device design, the two companies aim to improve the ease-of-use and image capture experience of cameraphones.
The alliance delivers value by leveraging each company's intellectual property, particularly Kodak's patents covering digital imaging and Motorola's patents for wireless communications. This cross-licensing agreement between Kodak and Motorola delivers royalty revenues to Kodak. In keeping with both company's policies regarding royalty agreements, financial and other details will not be disclosed.