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View Full Version : Kodak Shutters Digital Cameras (The Motley Fool)



convergent
08-03-2006, 01:15 PM
Kodak Shutters Digital Cameras (The Motley Fool) (http://us.rd.yahoo.com/dailynews/rss/digitalimaging/*http://news.yahoo.com/s/fool/20060802/bs_fool_fool/115453416910)

The Motley Fool - After more than a century of making its own cameras, Eastman Kodak (NYSE: EK - News) has focused on a new strategy to develop profits: outsourcing the manufacture of its digital cameras. In a deal for an undisclosed sum of money, the venerable film and camera maker will pass off those operations to Flextronics (Nasdaq: FLEX - News), along with 550 jobs.

convergent
08-03-2006, 01:23 PM
What the? I don't get what Kodak is doing. It seems like they are all over the place from one month to the next. I just read three news items about Kodak and it seemed that each one seemed to be more confusing than the other.

Lets look at this. Kodak originally was the big camera maker... like 100 years ago. As time went on, they decided they'd rather just make the consumables, and let other companies compete for the camera itself. That served them well for many years. Then the world of digital hits and sends Kodak into a spin. Slowly they came out with digital products.

At one point they were making everything digital from the cheapest point and shoots, to high end consumer digital cameras, to professional DSLRs, to high end digital backs for Medium Format cameras... and they've had good products in all categories. The only category they really haven't playe in, seems to be one of the most profitable ones... Consumer and Prosumer Digital SLRs.

Ok, so that all sounds good... right? No. About a year ago they completely abandoned the pro market and discontinued all their Pro DSLRs and Digital Backs. What? Seems like they would be more profitable than the low end stuff, right? I guess not. Now I read an article today that they are getting out of the low end cheaper digital cameras, to concentrate on the higher profit ones. And, this news article says they are actually outsourcing ALL their digital camera manufacturing to someone else? However, Kodak will "maintain control over the look and feel of Kodak products". Well, thats a relief!!!

In another news item, IDC reports US sales of digital cameras and ranks Kodak in 3rd place with 15% share, behind Canon in first and Sony in second.

zacker
08-03-2006, 02:17 PM
and letting 500 people go too! whats with these guys?

convergent
08-03-2006, 02:41 PM
I think you misinterpreted the annoucement. When employees are outsourced, they are not fired... at least not immediately. They are transferred along with all the other assets to the other company. In many cases, that would be the end of it. If the company taking them has redundant functions after the outsourcing, then their jobs may be at risk. However, Kodak announced yesterday that they were laying of 2,000 people, so the number is actually higher.

ZR2Blazer
08-03-2006, 03:37 PM
:eek: big business is just amazing......tossing 2,000 people out like its nothing :doh :( :mad: :Hammer

convergent
08-03-2006, 03:56 PM
Well... better 2,000 than all of them. If they can't make a profit, then they have no choice really. They reported a lost of about a quarter billion dollars for this quarter... pretty serious problem.