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Tuesday, August 01, 2006

Kodak Withdraws from Manufacture of Consumer Digital Cameras

Kodak Announces Agreement With Flextronics for Design, Production and Distribution of its Consumer Digital Cameras

Move will bring greater flexibility and cost efficiency while ensuring Kodak’s world-class quality and product leadership in the digital camera marketplace

ROCHESTER, NY and SINGAPORE, Aug. 1 -- Eastman Kodak Company (NYSE: EK) today announced an agreement in which Flextronics International Ltd. (NASDAQ: FLEX) will manufacture and distribute Kodak consumer digital cameras and will manage certain camera design and development functions. Under the agreement, Kodak will divest its entire digital camera manufacturing requirements to Flextronics, including assembly, production, and testing....


Posted by: OREN GRAD


Blogger Aaron said...

My first reaction is... what exactly is Kodak going to be doing in the future? There will be little or no film & paper. They don't do Digital SLR's, now they hand over digital compacts to another company. All they seem to want to do is play around with ccd's and CMOS chips, but release nothing themselves.

I love the line, "This move ...ensures Kodak’s world-class quality and product leadership in the digital camera marketplace." That means if Kodak were to keep doing their own cameras they couldn't ensure 'world-class' quality. What an admission :)

Perhaps they don't do world-class quality now. I know my SLR/n isn't so great in the quality stakes.

8:16 PM  
Blogger Ken Tanaka said...

Not surprising. Kodak continues to try to find a new role in the world. But the little-o'-this/little-o'-that strategies that recent management campaigns have timidly waded into have been nothing but drains on shrinking resources. Handing over the manufacturing of its cheap digital camera business to Flextronics (which manufactures a staggering array of other consumer electronics products) will help staunch Kodak's operational hemorrhage but it will also limit Kodak's prospective margin opportunities. That Kodak's market valuation has reached a 15 year low at this writing is no surprise.

Throughout the history of contemporary business there are very few examples of companies surviving, let alone leading, the kind of sea change that Kodak has experienced during the past 10 years. Twenty five years ago I worked for a large (30,000+ headcount), extremely successful company that was steam-rolled by the advent of personal computers. Week after week, month after month I witnessed otherwise intelligent men comfort each other in arrogance and denial and make positively cowardly and delusional group-think decisions that quickly led 30,000 people over a cliff. Kodak seems to be in a similar predicament.

9:03 PM  
Blogger yunfat said...

Is this a surprise to anyone? In 10 years we have gone from digital being a fad, to putting Kodak out of business. Interesting times indeed.

Mama just took my kodachrome away.

12:37 AM  
Blogger Impasse Lebouis said...

After seven consecutives quaterly losses, Kodak had to give something to the analyst to reassure them.

Kodak is expected to loose between $500 to $800 millions this year.

Second quarter film related sales were $1.52 billion. Film ain't dead yet.

Digital sales still growing in the industry but the rate of growth is slowing down to 10% from an expected 16% to 22%

9:07 AM  
Blogger DonovanCO said...

Any bets on how long it will be before Kodak either outsources and sells off all its products. The pieces may be worth more than the whole.

11:02 AM  
Blogger Carl Dahlke said...

Truely modern corporations (like Nike) don't actually manufacture anything - they just manage brand names. Looks like Kodak is moving in that direction except for their film business. Now the question is - how astute will they be at brand name management.

1:42 PM  
Blogger Dave New said...

What you are seeing Kodak doing is similar to what other large companies in commodity markets have done.

None of the large auto companies do their own engineering anymore. They just do design work, farm out all the engineering to suppliers, then integrate it into the design. Although they all (to a greater or lesser extent) still do all their own final assembly work, some companies have been experimenting recently with cross-assesmbly agreements with other manufacturers or even suppliers.

That last bastion may fall sooner or later, and then you'll see all the final assembly work farmed out to suppliers, as well.

2:39 PM  
Blogger Just Plain Hugh said...

Kodak keeps abandoning "nich" prodacts, but all that will be left are niche products. I would dearly love to have the opportunity to buy some of Kodak's discontinued products ( a couple cases of 120 Pan-X or Verichrome Pan for starters, the medium format back they were making looked good too ) I can't think of a single product that Kodak still makes that I would freak out about if they discontinued , except maybe Kodachrome, although try to buy it over the counter outside NYC.

11:39 PM  
Blogger RobertoC said...

Do you remember the last sentence of The Name of the Rose"?: "Stat rosa pristina nomine, nomina nuda tenemus".
Well, maybe Eco did not have brand names in his mind, but this is what is happening. Only names are left, nothing else.

5:16 AM  

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