Kodak's Moment

It's a household brand and still the world's biggest player in photography. But will
Big Yellow dominate the brand new world of digital?
By Heinz Bulos
July 2003

icture this: \ou and your amily are
at the Grand Canyon. 1he sun is
about to set and the sky casts a
reddish glow. \our kids are giddy at the
breathtaking scenery. And you are your
spouse are in high spirits. \ou gather
eeryone to a picturesque spot. A Kodak
moment, you chuckle. But, uh-oh, there`s
no camera. Drat. 1he chance to capture
this memory, but the moment is lost
oreer.

Now, imagine a world without pictures.
Isn`t that a dreary world Photographs are
part o our lies. \e take pictures eery
chance we get: when we trael, when
there`s a special eent, when we want to
express our creatiity, when we need to
document images, and yes, when we hae
to capture irreutable eidence.

\e swap pictures, put them in our wallets,
display them in our liing rooms, archie
them in albums, hang them in our walls,
publish them in magazines, put them in
billboards, and make posters out o them.
\e print them, scan them, ax them, copy
them, e-mail them, and post them on \eb
sites. \e make wallpapers out o them or
our computers and mobile phones. \e
crop them, shred them, paste them, and
piece them together. 1hey make us laugh,
cry, mad, cringe, and remember.

So it wouldn`t be surprising that nearly 85
billion ilm exposures were made
worldwide in 2001. And that some 550
million households around the world own
at least one camera, with some 85 million
cameras sold last year. Photography is an
>80 billion industry today.

And Lastman Kodak Company is the
largest photography company in the
world, in terms o market share. Last year,
the company made >12.8 billion in net
sales and >0 million in net income. It is
number 150 in the lortune 500. It has a
market alue o >8 billion and earned a
25 return to stockholders, ending 2002
as the Dow`s top perormer. It has the
third highest one-year growth in earnings
per share ,LPS,, at 915, and second
largest ie-year LPS growth, at 205.

In the Philippines, Kodak made close to
P2.4 billion in sales and nearly P100
million in proits in 2001, trouncing
competitors. 1his year is particularly
special or Kodak Philippines, which
celebrates its 5
th
anniersary in the
country.

Kodak has a long history with the
Philippines. In the early 1900s,
entrepreneurs imported Kodak products
rom Rochester, New \ork. But it was in
March 1928 when Kodak Philippines Ltd.
was established as a wholly owned
subsidiary o Lastman Kodak.

lilipinos hae a sot spot or the
company, haing turned the iconic brand
into a colloquial erb and embraced it into
popular culture. Mag/oaa/av` is as much
part o our tivgva fravca as iero` and
vagcotgate`.

It remains the biggest player in the local
photography market. I market share is
the ultimate measure, we`ll be 50 more
than the nearest competitor,` boasts
Antonio Cinco, Country General Manager
o Kodak Philippines.
P

1here hae been dramatic gains in
growing our business in the last decade,`
Cinco adds. lrom a market share in the
mid 30s in the early nineties, Kodak
Philippines now controls more than 50
o the market. It has more than 450
Kodak Lxpress minilabs across the
country.

Cinco, who concurrently heads the
position o Consumer Imaging Asean
Business Manager, has been with Kodak
or 25 years, haing started as an
inentory planner, gien his BS
Mathematics degree rom De La Salle
Uniersity. le moed rom one position
to another, eery two to three years,
including sales, inance, administration,
operations, and marketing. Ater a stint
handling Consumer Imaging at the
Malaysia operations, Cinco, seen years
ago, was named General Manager o
Kodak Philippines. And he has since been
growing Kodak`s market position.

Picture imperfect
ut things haen`t really been
picture perect. 1he US media and
inestor community hae been
particularly harsh at Big \ellow, which is
portrayed as sort o a dinosaur akin to
Xerox and A1&1-icons o American
business that are mature and in decline.

Despite the impressie perormance at the
Dow Jones Industrial Aerage Index last
year, Kodak`s stock ,ticker: LK, has been
a laggard. Its >12.8 billion in net sales in
2002 is actually a 4 drop rom the
preious year. And instead o steadily
growing, reenues are actually lower
compared to seeral years ago.

Business\eek and lortune quote \all
Street insiders reerring to the company
with words just as distressing` and
shocking` and to its management as
entrenched, inbred, and unresponsie`.
It`s described as alling o` and too late
in the game`. Standard & Poors ,S&P,
recently retained a one-star rating or
Kodak, a sell recommendation.

In the past decade, Kodak has been
hampered by internal problems: excessie
costs, conused marketing, bloated
workorce, requent management changes,
and a complacent culture. \orse, new
competitors such as Lpson, Canon, Sony,
and lewlett-Packard ,lP, are challenging
its digital strategy. Its main rial luji
Photo lilm is gaining market share in the
consumer ilm business. 1he company has
responded by continually restructuring-
cutting down on expenses and sta. And
it has succeeded to a certain extent.

\et, there remain three obstacles to
Kodak`s growth. 1he global economy is
still weak and is expected to remain so at
least until 2003. Kodak itsel expects sales
to be lat this year. In his Chairman`s
Letter in the 2002 Annual Report,
Chairman and Chie Lxecutie Oicer
Daniel Carp notes, 1here are ew signs at
this time o an upturn in the economy,
and we expect 2003 to be another ery
challenging year. \e will continue to ace
many o the same marketplace challenges
experienced in 2002, including heightened
geopolitical tensions.`

A bad economy means uncertainty and
pressure on discretionary income, which
leads to the second obstacle: consumers
haing second thoughts about trael, a
major drier o ilm sales. \e suer
when tourism and trael are down,` Cinco
explains, Our business is classiied under
recreation.`

And that is a luxury many increasingly
cannot aord. In a 1hird \orld country
like ours, the typical lilipino household
budget is eaten up by the bare necessities.
B
Cinco says, 1he economic conditions are
not conducie or people to buy
cameras.` le adds, \e`re competing
with the same limited disposable income.`

In an ACNielsen surey o lilipino
Internet users mid last year, about 55 o
the respondents deerred spending or the
past six months. 36 deerred spending
or rest and recreation in the orm o
extended holidays, higher than the 28
ratio in Asia Paciic.

\hateer is let, or the typical lilipino
consumer, there is a higher incidence to
buy a cell phone than other product
categories. Cameras are ranked low,` he
says, while een the newer category o
DVD players is high on the list. 1his
partly explains the 11. drop in sales or
Kodak Philippines in 2002. But this
problem is not unique to Kodak,
according to Cinco. Competitors and
other product categories suer rom the
same predicament.

In the ACNielsen study, asked which
consumer electronic purchases were
deerred in the last six months, digital
cameras topped the list with 34. In the
next six months, the respondents who
planned to deer purchases o consumer
electronics still exceeded those who push
through, except or mobile phones.

Shift to digital
he third major challenge to Kodak,
howeer, is the trend towards
digital. Certainly, Kodak is a major
player in digital photography. And it`s not
like it was caught lat-ooted. Cinco
stresses, It`s a deliberate change in our
portolio. \e`re driing change, not swept
by it.`

Kodak, in act, introduced the irst digital
camera. In 196, it deeloped the world`s
irst digital camera prototype. In 1986,
Kodak designed the world's irst
megapixel sensor and sold the irst
commercial megapixel camera in 198. In
1984, along with Apple, it launched the
world`s irst consumer digital camera. It
has the largest patent pool o digital photo
technology o any company in the world.
And it recently introduced an
unprecedented 14-megapixel digital SLR
camera.

lrom the early expensie, one-megapixel,
brick-size cameras a ew years ago, digital
cameras with excellent quality and
adanced eatures are within easy reach o
consumers today.

But the share o digital sales to total
reenues is still small. Kodak`s 2002 net
worldwide sales o consumer digital
cameras are estimated at >550 million, a
10 increase rom 2001. But that
represents just 6 o its photography
sales and 4 o total net sales. In contrast,
its lagship consumer ilm products,
including 35mm ilm, Adantix ilm, and
one-time-use cameras ,classiied as ilm in
the industry,, generated some >2.4 billion
in 2002. 1hat`s more than 4 times the
digital camera business.

Neertheless, the uture looks bright or
digital photography in general. It`s already
a mass market consumer product in major
markets. In the US, or instance, 20 o
households already own a digital camera at
the end o 2002, and this is expected to
reach 30 this year.

\orldwide unit shipments o low-end
digital cameras reached some 24 million
units in 2002, capturing 28 o total
worldwide camera sales ,not including
one-time use cameras,, according to
Ino1rends Research Group. North
America is the leading region, making up
39 o digital cameras sold in 2002,
1
ollowed by Lurope with 2 and Japan
with 26 unit share.

International Data Corporation ,IDC,, on
the other hand, pegged worldwide global
shipments in 2002 at 2.9 million units
and projected to grow to 33 million in
2003.

Ino1rends projects worldwide reenues
rom low-end ,sub->1,000, digital camera
sales to reach >11.8 billion in 200. Unit
olume is orecast to grow at a compound
annual growth rate o 16 to reach 51
million units in 200. Digital cameras are
expected to become ully mainstream in
North America, Lurope and Japan during
this period.

In the same report entitled \orldwide
Digital Camera lorecast`, the top ie
endors worldwide in 2002 were Sony,
Olympus, Canon, luji and Kodak.
Combined, they make up 60 o the
worldwide digital camera shipments.

Despite its pioneering initiaties,
inestments in research and deelopment,
and a major hit-the LasyShare line o
digital cameras-Kodak is an also-run in
the digital camera market. According to
IDC, Kodak is only third in the US digital
camera market, with 12 share, behind
Sony and Olympus. In the Philippines,
Sony and Canon lead Kodak. \orldwide,
the top three are Sony with 20 market
share, Olympus with 16, and Canon
with 15.
Cinco says he doesn`t really consider the
likes o lP and Sony as competitors. In
some ways, we work with them,` as with
its ailed joint enture with lP on the
Phogenix minilab and on the Common
Picture eXchange Lnironment, an
initiatie that will make it easier or
consumers to order prints o their digital
images rom any photoinisher. Besides,
he adds, they help grow the market.`
Analysts note that the digital business is a
totally dierent ballgame, where cut-
throat competition and price cuts are the
norm. Consumer electronics and
computer players such as Sony, Canon,
and lP are more used to such rules. And
unlike Kodak or luji, they are not
cannibalizing any existing product
category.

Kodak, on the other hand, is still pretty
much a consumer ilm business, and while
its digital business is still tiny, it`s growing
ast at the expense o ilm. Its consumer
digital camera sales increased by 36 in
the last quarter o 2002. In the
Philippines, reenues rom digital
products and serices aren`t lodged into
Kodak Philippines` books-authorized
distributors directly import and sell
them-but, Cinco says its digital business
is growing at close to the 35-40 a year
rate the global digital business is
experiencing.

But Kodak`s net worldwide sales o
consumer ilm products decreased by 6
in 2002. Its net worldwide photoinishing
sales declined by 4 as well. Kodak
reports both are partly due to digital
substitution. 1his is especially true in its
Japanese market, the second largest in the
world. In the US, digital photography
contributed to a 3 decline in ilm sales
in 2002, which will decrease urther by 5
this year.

Not only will digital aect ilm sales, it
will also adersely aect its proits, as
margins or digital cameras are thin
compared to the ery lucratie ilm
business. Its 2002 net proit margin is
5.8, lower than its 5-year aerage o
.5, despite the aggressie cost-cutting,
and it is at least partly due to digital
substitution.

In act, its digital business is losing money.
Prices or digital cameras keep going
down, despite eer increasing olume
sales. loweer, Kodak has actually been
spending a lot to make its digital business
account or a higher percentage o
reenues. And CLO Carp`s goal is to
make its digital business proitable by
2003.

Kodak is serious about digital. Recently,
Carp hired Antonio Perez, an imaging
industry eteran and lP executie, as its
President and Chie Operating Oicer, as
well as \usuke Kojima o rial Olympus
Optical Co. Ltd. Both are experts in the
digital consumer photography business.

Cinco stresses, Kodak has long taken the
position that digital is not a threat, it`s an
opportunity.` le adds that digital has
widened the possibilities. Kodak has been
oering products such as greeting cards
and business cards with photos, printed
on the ly. 1here`s a lot more you can do
now,` he enthuses, 1his thing will just
explode.`

1raditional rivals
ut it`s still a long way o beore
eeryone switches to digital
photography. In the meantime,
Kodak has to end o aggressie moes
by its traditional rials-luji, Aga, and
Konica.

luji remains its biggest adersary. \hile
Kodak remains the leader in the US and
other global markets, luji dominates in its
home country, Japan, and is seriously
challenging Kodak in the key US market.

Locally, luji trails Kodak by a long mile.
luji is exclusiely distributed by \KL
Color Laboratory. German company Aga
is distributed by Photokina Marketing
Corp. while Japanese irm Konica is
distributed by Columbia Global Photo
Sales Corp.

Photokina made P5 million sales in
2001 while Columbia generated P260
million. 1heir proits also paled in
comparison to Kodak`s P99.8 million,
with P649 thousand and P2 million,
respectiely.

In terms o distribution muscle, out o the
estimated 1,500 photo retail outlets in the
country, Kodak has oer 450 outlets. 1wo
o its biggest authorized distributors are
Kameraworld, which has oer 80 stores
nationwide, and Island Photo, with 40
branches.

Photokina has oer 500 retail outlets in
the country and 130 specialized shops
called Photo Plus. Aside rom Aga, it also
distributes Perutz. It claims to be the irst
to introduce one-hour and later hal-hour
photo processing laboratories in the
Philippines and the irst to introduce the
turnkey ranchising concept or photo
retailing. Recently, Sony named Photokina
as a channel business partner.

\KL Color Lab, or luji-\KL, on the
other hand, has around 400 plus dealers
and more than 20 company-owned
minilabs, including 9 lujiilm Digital
Imaging Imaging Stations-one-stop
digital shops`-which oers a ull range
o photographic serices, with the
lrontier Digital Minilab as its centerpiece.

In the US, luji has more than 5 thousand
minilabs, capturing 60 o the US digital
minilab market. Kodak, on the other
hand, only has 100 ,plans were snagged by
a botched partnership with Gretag, a
German company which went bankrupt,,
with plans to grow to 1,000.

B
Keep in mind, howeer, that the US
market is quite dierent rom the
Philippines. lere, retail outlets with
minilabs are common. In the States,
Kodak`s sel-serice Picture Maker kiosks
dominate with 23 thousand locations, with
80 o them capable o processing digital
prints. \orldwide, there are some 40 to
45 thousand stand-alone kiosks. Kodak
has 80 o the kiosk market.

Kiosks are successul in the US because
they don`t hae a Kodak Lxpress
program,` explains Cinco, one-hour
processing is not the norm, usually it`s
next day.` le adds, 1here are not as
many retail minilabs as we hae, but in our
case, the number o kiosk is not as many.`
Neertheless, you`ll ind a sprinkling o
Picture Maker kiosks in seeral outlets,
which allows customers to photo-edit
both scanned prints and digital images by
correcting or colors or adding ancy
borders.

1he Kodak Lxpress Store program has
been hugely successul, as it taps
entrepreneurs to put up the capital and
handle the operations. Lery minilab is
operated by an independent owner,`
Cinco explains, adding that such
entrepreneurs, who are typically
photography enthusiasts, are ery hands-
on. Besides, Kodak Philippines doesn`t
hae to carry oerhead expenses, making
the local subsidiary strictly a marketing
arm.

Recently, Kodak Philippines has been
redesigning its Kodak Lxpress stores to
gie customers a more hands-on
experience. Digital serice workstations
and demonstration tables showcase new
products and technologies. More images
o eeryday moments will line up the
stores to accentuate its marketing
message.

New competitors
new marketing and distribution
channel is the Internet, with
online photoinishing serices.
Kodak again leads here with its
Ooto.com site, a company it bought in
2001 or >58 million. Ooto is the market
leader with 6.5 million users storing
photos online and ordering prints or
deliery.

Locally, Kodak Philippines recently
launched PrintKodakLxpress
,www.kodakexpress.com.ph, ater
distributor Kameraworld launched its
ePrintme online serice. 1here are 18
outlets in Metro Manila that oer
PrintKodakLxpress serices.

1he Internet certainly helps drie camera
use and sales. Among consumers,
communities o amateur and proessional
photographers hae mushroomed, as the
Internet has made it easy to share photos.
Business and e-commerce sites likewise
are key driers o digital images. Can you
imagine eBay without pictures` asks
Cinco, Pictures are a ital part o the
Internet economy.`

But locally, Cinco is cautious about the
short-term proitability o online photo
ulillment sites. 1he main obstacle is the
aailability o broadband, as it takes time
to upload photos.` Neertheless, he sees a
niche segment that will take adantage o
the serice.
Kodak is also making a play in the home
photo-printer business, dominated by lP,
which has also started selling digital
cameras. Kodak recently launched a >199
printer that links directly to an LasyShare
digital camera, without the need or a
computer, the LasyShare Printer Dock
6000. It`s a comeback or Kodak, which
discontinued a line o inkjet printers
A
beore. 1his time, it`s using dye-
sublimation technology. Kodak considers
this as an accessory to its digital camera
rather than a stand-alone printer.
Interestingly, Kodak is bound to beneit
also rom another trend: camera phones.
Research irm Strategy Analytics predicts
that 16 million camera phones will be sold
worldwide in 2002, with growth surging to
14 million in 200, representing 20 o
all cellular handsets sold.
Already, this has been a killer application
or mobile phones, particularly in Japan
and South Korea. Len in the Philippines,
there appears to be a surge in the use o
camera phones. Len without the high
bandwidth capability or transmission o
images, consumers are turning to
photoinishing serices o Kodak and its
ilk to print pictures taken rom their
phones. Cinco says, I was surprised to
learn that the typical camera phone user
prints 15 pictures.` Kodak currently
supports the Nokia 3650 and 650 or
photo printing.
ther businesses
\hat`s oten oerlooked are the
other business segments o
Kodak other than its better known
Consumer Imaging, Proessional Imaging,
and Digital and Applied Imaging groups.

1he Consumer Imaging Diision is the
largest group within Kodak Philippines,
accounting or the bulk o Kodak`s
business in the country. It manages the
operation o the Kodak Lxpress Store
Program and handles the marketing o
135mm and Adantix cameras, color and
black & white ilms, digital kiosk, among
others.
1he Proessional Diision oers a wide
rang o imaging solutions rom capture to
output to photo labs, studios, and
proessional photographers. 1he Digital &
Applied Imaging Diision is responsible
or Kodak`s astest-growing business,
marketing its line o LasyShare digital
cameras and digital serices.
\hile 0 o total sales come rom the
consumer business, 30 comes rom
lealth Imaging, Commercial Imaging,
and Lntertainment Imaging. As Cinco
points out, Kodak is the market leader in
these other segments.

Its lealth Imaging Diision proides
imaging technologies rom conentional
x-ray ilm to digital systems or diagnostic
and non-diagnostic applications. Kodak x-
ray products are used in the leading
hospitals in the country, including St.
Luke`s General lospital and Makati
Medical lospital.

1he Commercial Imaging Group sells
document scanners, capture sotware,
preseration technologies, on-demand
printing, imaging serices, and others.
Nine out o ten local customers o
microilms also use Kodak. 1he Census
Project o the National Statistics Oice,
which computerized ciil serice
documents like birth, marriage, and death
certiicates, made use o Kodak scanners
and capture sotware.

Kodak`s Lntertainment Imaging Diision
has also been proiding motion picture
ilms to the local entertainment industry
as early as the 1930s. Now, it oers a
complete line o camera negaties, post-
production ilms, and color print ilms.
It`s also as the oreront o digital cinema
as the company is set to commercially
release an operating system that supports
the loading, scheduling, control, and
playback o eatures, trailers, and pre-
O
show content on multiple digital cinema
screens.

Obiously, Kodak has the most complete
portolio among its numerous
competitors. Consumer electronic
companies like Sony, Canon, and lP only
hae digital cameras and photo-printers.
\eb-based photoinishing companies
such as Shutterly are just that. Camera
manuacturers like Nikon and Olympus
are only into digital cameras. lilm rials
Aga and Konica are limited to ilm sales
and photo processing serices, and are
obiously behind in digital processing.
Only luji can challenge Kodak in almost
all ronts.

Cinco explains, 1hey don`t hae a
complete portolio. 1hey don`t hae
stores like us. \e can touch consumers
better than they can.`

It`s hard to write o a company that has
its hands in all the pies. It has ilm and
digital cameras, ilm and digital photo-
inishing serices, online channels and
physical outlets, sel-serice retail kiosks
and home photo printers, photo paper
and digital displays, and consumer and
commercial imaging businesses.

Strategy
anything, digital has jumpstarted an
industry long considered mature and
stable. Now, Kodak and the rest o
the industry are touting a new trend
dubbed inoimaging`.
Inoimaging is as much a marketing ploy
to drie growth as an actual industry
classiication. It`s described as the
conergence o inormation technology
and imaging science. Photography is only
a part o it, but it extends photography's
capability. Inoimaging is estimated to be
a >385 billion industry, dwaring the
photographic industry`s >80 billion. Plus,
it`s a growth industry, with aerage growth
o 10 a year. It represents more than
200 companies, with no single company
haing more than a 6 share.
As a practical example, doctors in Makati
and Cebu can diagnose a patient ater
simultaneously iewing a scanned and
digitized x-ray. Another common example
is when you e-mail digital photos o your
baby to relaties abroad.
Inoimaging is made up o three inter-
related markets: deices, inrastructure,
and serices and media. Deices capture,
digitize, and print images and inormation.
1hey include digital cameras, scanners,
printers, PDAs, and wireless deices. 1his
represents 48 o the inoimaging
industry.
Inrastructure includes the back-end
hardware and sotware that allows images
to be stored, edited and distributed. 1his
represents 14 o the industry. 1he
serices and media segment allows images
to be shared and presered. 1his includes
photo printing, document preseration,
and all kinds o media like inkjet paper,
CDs, ilm and photo paper. It`s 38 o
the industry
Interestingly, Kodak is a major player in
these three segments. And it`s in the
context o inoimaging that the company
has set its our key strategies or growth:
expand the beneits o ilm, drie image
output in all orms, acilitate ease o use in
digital imaging, and deelop new
businesses in new markets.
1he irst strategy o expanding the
beneits o ilm looks at three ronts. One
is to seek new markets worldwide. Ater
all, only 36 o households worldwide
hae a ilm camera. Kodak is bullish on
I
emerging markets like China, Russia, and
India, which grew 25, 20, and 8,
respectiely. Oerall, emerging markets
account or about 20 o its reenues.
Len in the US, there`s still room or
growth. 1here are still some 28 o US
households that do not own a ilm
camera.

In the Philippines, 0 ,o lilipinos,
hae not experienced photography.
Camera ownership is still ery low. \e
want to get as many households to get
into photography.`

Kodak Philippines has taken a low-cost
strategy as ar as cameras are concerned.
Its KB10 model is its best-selling camera.
At just P00, it has become a hugely
successul product or the company.

1wo is to encourage current camera
owners to take more pictures, through
aggressie and eectie adertising. lrom
highlighting eents, Kodak`s adertising
message now emphasizes eeryday eents
as Kodak moments. It`s Share Moments.
Share Lie`" campaign was named by a
larris surey as 2001's most eectie
adertising campaign.

In the same way, in the Philippines, taking
pictures has always been associated with
special eents, but Cinco says to get more
lilipinos to take more pictures, the
company has emphasized not just special
eents in its adertising but appreciating
the here and now. 1hat`s why eeryday
moments` such as your baby`s irst
haircut or irst tooth are picture-taking
eents.`

1hree is to add a digital touch to ilm use.
Its Adantix LasyShare ilm camera gies
the ability to transer photos to a
computer or sharing. Its ProShots
sotware allows proessional
photographers to automate labor-
intensie image management processes.

1he second strategy-driing image
output in all orms-gies customers a
wide range o choices on how they can
iew their photos. lor all the dire
predictions on the death o ilm-and
paper-people still want hard copies.
Digital camera users aren`t content with
storing their photos in their computers,
they`ll want to get prints. In 2002, ilm
prints made up 80 o the market,
according to IDC, but that`s expected to
decrease to 65 by 2006, with prints rom
digital cameras increasing.

1his is where Kodak`s arious
photoinishing options come in. Its latest
innoations in digital photo processing
include the I.Lab System, or high-olume
processing at Qualex labs, and its digital
lab system. I.Lab is the cornerstone o our
Perect 1ouch premium processing, which
can improe een the most poorly
exposed image.

Although it ended its partnership with lP
on its Phogenix system or inkjet printing
or retail outlets, it`s now working with
Noritsu Koki Co. o Japan or this digital
minilabs, but using the traditional
photographic processing technology called
siler halide rather than inkjet.

Kodak also bought recently Applied
Science liction Inc.`s rapid-ilm-
processing technology, which deelops
conentional ilm without chemicals,
conerts photos into digital iles, prints
pictures, and stores them on a compact
disc.

1hen there are the 35,000 Kodak
PictureMaker kiosks worldwide, which use
Kodak sotware and thermal media.
In its lealth Imaging segment, it boasts
o its DryView laser medical imaging
systems, which use an innoatie dry
process or output rom digital capture
systems. In its Commercial Business
business, it bought LNCAD, a market
leader in inkjet printing. It has a joint
enture with leidelberg called NexPress,
which introduced a new short-run digital
press that has high demand in the graphics
market.
1he third strategy o acilitating ease o
use in digital imaging is what dierentiates
Kodak rom its new competitors. Kodak
is best known or its easy to use cameras
and ilms, and it is building its digital
uture on this critical beneit.

Cinco says that while competitors position
their digital cameras in terms o technical
superiority, Kodak ollows the line \ou
press the button. \e do the rest.`` which
Kodak`s ounder George Lastman coined
that phrase one hundred years ago.
Despite the conenience o using digital
cameras, or most consumers, it`s still
conusing and time-consuming to upload,
manage, manipulate, and print their digital
photos. Kodak ound out that less than
0 o digital camera owners are satisied
with getting their pictures on and o their
computer and only hal re satisied with
the prints they make at home.
LasyShare has resonated with consumers,
making Kodak the leading ease-o-use
innoator in digital photography. \ith the
LasyShare Dock, users can just put the
camera in the dock, press the button, and
immediately transer pictures straight to
the computer. 1here are no conusing
options. Nothing intimidating.

1he ourth strategy is to deelop new
businesses in new markets. 1he latest
technology Kodak deeloped is called
OLLD technology, or Organic Light
Lmitting Diode technology. It`s a new
generation, lat-panel display technology
that produces sharper and brighter
pictures than today's liquid crystal
technology. Kodak has branded these
displays as NuVue, and will ind its way
into digital cameras, PDAs, and mobile
phones.

So, despite the dire predictions o the
media and inestor community, brushing
o Kodak as a slow-to-no-growth
company, there`s really much to look
orward to. It may no longer be the
undisputed giant it once was, but it`s in
the best position to beneit rom whereer
the market leads to. 1here are
tremendous opportunities,` says Cinco,
1hat`s what makes it exciting. 1he uture
is een brighter now.`