Eastman Kodak: Another Rochester Success Story

After developing a method for dry-plate photography, George Eastman (Pictured below) established The Eastman Dry Plate and Film Company in 1884. In 1888 it introduced its first camera, a small, easy-to-use device that was loaded with enough film for 100 pictures. Owners mailed the camera back to the company, which returned it with the pictures and more film. The firm settled on the name Eastman Kodak in 1892, after Eastman tried many combinations of letters starting and ending with "k," which he thought was a "strong, incisive sort of letter." The user-friendly Brownie camera followed in 1900. Three years later Kodak introduced a home movie camera, projector, and film.

Ailing and convinced that his work was done, Eastman committed suicide in 1932. Kodak continued to dominate the photography industry with the introduction of color film (Kodachrome, 1935) and a handheld movie camera (1951). The company established US plants to produce the chemicals, plastics, and fibers used in its film production.

The Instamatic, introduced in 1963, became Kodak's biggest success. The camera's foolproof film cartridge eliminated the need for loading in the dark. By 1976 Kodak had sold an estimated 60 million Instamatics, 50 million more cameras than all its competitors combined. Subsequent introductions included the Kodak instant camera (1976) and the unsuccessful disc camera (1982).

In the 1980s Kodak diversified into electronic publishing, batteries, floppy disks (Verbatim, 1985, sold 1990), pharmaceuticals (Sterling Drug, sold 1994), and do-it-yourself and household products (L&F Products, sold 1994).

Kodak entered a joint research and development project with four Japanese photo giants (Canon, Nikon, Minolta, and Fuji Photo Film) in 1992 to develop the Advanced Photography System. Also that year the company introduced the Photo CD, a CD capable of storing photographs.

George Fisher, former chairman of Motorola, became Kodak's chairman and CEO in 1993. Fisher began cutting debt by selling noncore assets. Kodak spun off Eastman Chemical in 1994. Sales in 1996 included its money-losing copier sales and services business.

Kodak wrote off nearly $1.5 billion in 1997, mostly because of costs related to the layoffs. That year Kodak bought the document management operations from Wang Laboratories (now part of Getronics), and the next year it formed deals to expand its digital offerings, including a collaboration with Intel and Adobe Systems allowing consumers to manipulate, print, and send personal photos from their PCs. Kodak acquired the medical imaging business of Imation in 1998, but it also unloaded more of its noncore operations, including its 450-store Fox Photo chain.

President and COO Daniel Carp replaced Fisher as CEO in early 2000. Also that year Kodak formed a joint venture with computer giant Hewlett-Packard to develop photofinishing equipment for digital photography; extended its push into the online photo business by buying the remaining shares (it already owned 51%) of PictureVision, a digital image storage service; and acquired Lumisys, a maker of digital imaging systems for the medical industry.

In early 2001 Kodak announced a three-year plan to introduce camera and film vending machines in about 10,000 high-traffic US locations (amusement parks, zoos, airports, ski resorts, and other tourist spots). The company also completed its acquisition of Bell & Howell's (now ProQuest) imaging operations. In April former Avaya executive Patricia Russo was named president and COO; Carp remained chairman and CEO. Also in 2001 Kodak acquired Ofoto (rebranded in early 2005 as Kodak Imaging Network), a provider of online photo albums (EasyShare Gallery) that friends and families of registered users can view and download.

Further hits to the economy and Kodak's revenue prompted management in 2001 to eliminate regional divisions and realign the business along product lines. In December, Kodak and SANYO Electric Co. announced the formation of a business venture to manufacture OLED displays for cameras, PDAs, and other devices. In January 2002 Russo left to rejoin Lucent Technologies; Carp assumed her responsibilities as president and COO. In May, Kodak renewed a multi-year agreement that secured its position as the exclusive imaging supplier of film and related products for The Walt Disney Company.

In April 2003 former Hewlett-Packard executive Antonio Perez was named president and COO, and in June, Kodak closed its only single-use camera factory in the US and shifted operations overseas. A month later Kodak said it would purchase PracticeWorks, a dental imaging and software business. In July, the company announced it would cut as many as 6,000 jobs worldwide. This came after reducing as many as 2,200 jobs in the US and Western Europe earlier in the year and cutting as many as 7,000 jobs worldwide in 2002. In October, Kodak purchased LaserPacific Media Corporation, which provides post-production film editing and processing for television, video, and motion pictures. In November, the company purchased Algotec Systems; a developer of advanced picture-archiving-and-communications systems (PACS).

In January 2004 the company completed its purchase of Scitex Digital Printing. The company, which Kodak renamed Versamark, makes commercial, high-speed inkjet printers. Also in January, on the heels of its announcement that it would stop selling film-based cameras in Western markets by year’s end, Kodak said it would also stop global production of its Advantix Advanced Photo System (APS) cameras, but production of APS film would not be affected. In February, Kodak Japan purchased the outstanding shares of digital camera developer Chinon Industries (it already owned about 60% of the company) and made it a wholly owned subsidiary.

Kodak sold its Remote Sensing Systems (RSS) business (including the Research Systems subsidiary) to optical imaging component maker ITT Industries in early 2004. The RSS unit designed satellite imaging systems for the aerospace and defense industries. The sale was in line with the company's strategy to focus on digital technologies and consumer and health imaging. It also acquired the Digital Print division of Heidelberger Druckmaschinen, as well as the company's 50% interest in NexPress, maker of high-end digital color printing systems.

In May Kodak completed a licensing agreement for Lexar Media to make Kodak-branded memory cards. The company renamed its Commercial Printing group to the Graphic Communications group, which consists of the Encad, NexPress, and Versamark subsidiaries, as well as the management of its Kodak Polychrome Graphics. Also that month the company announced a deal with one of China's largest telecommunications companies, China Putian, involving the sale of the company's mobile phones in Kodak's some 9,000 film and digital developing outlets throughout China.

More about Eastman Kodak here. Photo Credit: Eastman Kodak