Comment by smitty1110
2 days ago
I worked with an ex-Kodak guy, and he related the following story to me from the 80’s or early 90’s.
Xerox was kicking their ass, they were completely owning the copier market. But it was a natural fit for Kodak, they knew imaging better than everybody, why couldn’t they get into this market? This guy was on a crack team of engineers a VP assembled to create a competing product. 9 months later, they demo a fully digital copy machine, working, ready to go, with competitive pricing and features.
But the higher ups at Kodak were incensed. They told the product needs a redesign, because Kodak was a film company, so the product needed to use film for copying. The revised product was a complete failure, and was the reason said engineer left Kodak shortly thereafter.
My take is devotion to brand identity is death during these critical inflection points. YMMV
The problem was that Kodak essentially was a film chemical production company pretending to be an imaging company. The switch to digital meant they could no longer get the fat recurring profits from selling film that they were used to. Kodak's value peaked at $31 billion in 1996 ($58 billion in 2025 dollars) while the total value of the digital camera industry today is around $8 billion (https://www.researchandmarkets.com/report/digital-camera). Even if Kodak had pulled off a masterful pivot to digital and captured the entire market, it would have been disastrous for the company and led to it shedding most of its employees.
I think camera is a major smartphone selling point and certainly cannibalized the digital camera business. Kodak could have upgraded from camera to phone like Apple upgraded from mp3 player.
I doubt that Kodak could have built a complete phone. But they certainly could have been a tier-1 supplier of camera components and software to Apple and other phone manufacturers. It seems like Kodak didn't even really try.
Digital was disaster so the plan after 1996 was delay and deny. The question is: did it do enough extra business in those transitional years to make up for going bankrupt in 2012? And was it better ultimately for shareholders?
If Kodak were to have survived, it should have kept Eastman Chemical and morphed into that as imagining declined.
Yea, but, like, phones are digital cameras…
That's fascinating. It really seems that a lot of businesses end up hyper-optimized to deliver what they already offer, up until the point where anything that isn't a current offer is attacked by corporate antibodies. And that's when the growth they've optimized for suddenly stops.
There's way too much worship of Steve Jobs, but one thing he had right - either you develop the product that eats your cash cow, or someone else is going to do it.
I’ll never not talk about how he killed their most successful product ever at the time, in 2005— the iPod mini.
In one fell swoop, the small form factor iPod switched from a tiny hard disk to flash memory and the former model was discontinued, before competitors had even really come close to catching up.
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This sounds like an apocryphal story. Kodak did actually make copiers in the 80s/90s, I know because my elementary school had one (early 90s, in a suburb of Rochester). It was one of the very large models that do duplex, stapling, ~100 copies per minute, etc. They just presumably weren’t good enough/cheap enough to get much market share vs. Xerox and Canon. I’m not aware of any of their copiers using film, not even sure how that would work.
Large companies struggle to cannibalize their cash cows from within. Powerful managers step up and fight against change.
I think Microsoft is a notable exception. I was impressed how they went all in on Cloud Computing (at the cost of installed software business like Windows and classic Office) and think it‘s now doing the same with AI. Maybe it‘s because they almost missed the internet revolution and arguably lost in mobile.