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Kodak earnings worse than expected

Boxes of Kodak film are stocked in a camera shop Jan. 15, 2004 in London, England.

Kai Ryssdal: There's a line to be had here about nobody taking my kodachrome away, but it escapes me at the moment. Kodak, the pioneering photography company, missed earnings estimates by a mile today -- and warned investors it could have trouble staying in business if things don't go its way.

Marketplace's Steve Henn reports.


Steve Henn: The year was 1900, the product was Kodak's brownie camera. For just $1, it brought photography to the masses.

Kodak made a fortune -- not selling cameras, but by selling film. Then in the '70s, when Kodak still dominated this market, its scientists invented digital photography.

Mark Kauffman: It turned the business inside-out; it was a destructive technology.

Especially for Kodak. Mark Kauffman's at Rafferty Capital. He says when cameras no longer needed film, Kodak's core business collapsed.

Ed Lee follows the industry at Infotrends.

Ed Lee: Come the end of the decade, there will be very, very little film being used.

So Kauffman says one of Kodak's most valuable assets are the patents on digital technologies it created.

Kauffman: Between 2008 and 2010, they took in $1.5 billion in patent revenue.

And executives hope by selling rights to that technology will keep the company afloat as it tries to build a new business in digital printing.

In Silicon Valley, I'm Steve Henn for Marketplace.

About the author

Steve Henn was Marketplace’s technology and innovation reporter for the entire portfolio of Marketplace programs until December 2011.
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A friend of mine worked for Kodak in 1986 or so. He marketed products to the U.S. Govenment. One of these was a digital camera system that the Army loved. It was a suite with a camera, lenses, a computer (PC) and a modem. One day he is informed of a meeting, in the meeting were 13 vice presidents(bad sign when a company has that many vp's). He was told that they were killing the digital program,"We have to protect silver photography". He said that that was the moment that Kodak died.

Even my dentist is now using digital X-ray sensors instead of film. I'm sure Kodak has made their share of missteps, but what's a company built on film going to do when film goes away from lack of demand? Radical downsizing is my guess.

I was aghast at the sympathetic yarn spun by your reporter on this story. I am a photographer and have been in sales as well as photo lab work for sixteen years and I assure you the blame lies with Kodak. They're famous for introducing products, then turning their backs on them, and the end users with cameras and film types they unilaterally declare obsolete. In just the past few years products with names like 'Verichrome', HEI Infra Red and of course Kodachrome have been discontinued, big 'K' would say because of lack of demand. We users say 'Hogwash'. Kodak needed to reign in the bleeding caused by their inability to compete in a high tech market, and live within it's means. Cutting off it's own head to spite it's face was the wrongest of moves.

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