Due to fierce competition in the digital camera market and the enormous cost pressure, moreover in order to further improve profitability and productivity of digital products, Kodak chose in August 2006 to transfer the production, storage and transportation of digital cameras to Flextronics International; and shift a part of the design and development work to the Singapore enterprise. Although Kodak eliminated digital camera production, it took the reins in the high-end system design, contour and appearance design, user experience, and the R&D of digital cameras. In addition, Kodak reserved all intellectual property rights.
After the growing pains, Kodak made substantive advancement in its digital business. “In 2003, the digital business only contributed to 30% of the total sales. But now, more than 75% of the products on our product line are about digital products. Digital cameras, digital picture frames, digital video and such consumption products have been expanding their markets; commercial scanners, computer-to-plate, work flow software, digital printers and such commercial products are also emerging on a large scale. From 2003 to 2009, the company maintained more than 10% annual growth rate in its digital business. Even in 2009 when the whole world was swept by financial recession, Kodak stood out and presented us with a 12% growth rate. These figures show that Kodak’s transformation has successfully passed its initial stage,” Mr. Xu said with pride.
From B2C to B2B – the rise of commercial products
According to Mr. Xu, most of Kodak’s products target two groups: the consumer market and commercial market. This is what we usually describe as B2C business and B2B business. Two groups respectively control these two businesses: The Consumer Digital Imaging Group (CDG) and Graphic Communications Group (GCG). In the B2C field, Kodak supplies digital cameras, digital photo frames and digital videos, and provides consumers the special experience of discovering beauty and sharing happiness. In the B2B field, Kodak has developed computer-to-plate (CTP), digital printing, work flow software and the commercial scanner. Besides CDG and GCG, Kodak also has a FPG (Film & Photo Group), which operates the company’s traditional business in the image entertainment area. Additionally Kodak provides professional services to photographers, photojournalists, photographic studios and photo shops.
“Digital printing has a very promising growth prospect. In the aspect of laser digital printing (digital xerography), Kodak occupies the high-end market and provides corporate clients one of the best products of the industry. In the field of ink-jet digital printing, Kodak could hardly find a rival. Especially in the printing of variable data, such as invoice and lottery, Kodak owns a majority of market shares. Besides the ordinary black and white ink-jet printers, Kodak has also developed color ink-jet printers used for bill printing by banks and other institutions. Now we are popularizing a Stream digital ink-jet technology, which is a core ink-jet technology exclusively owned by Kodak. stream digital ink-jet printers are applicable to mass and streamline productions, and are completely compatible with variable information. It is expected that owing to the low cost, high efficiency and the offset printing-comparable precision, Stream digital ink-jet printers will finally bring a revolution to the traditional printing industry. In Kodak, we can say that all B2B business under the operation of GCG is about digital,” Mr. Xu said.
“Kodak positions its core strategy in ‘gaining sustainable growth based on the superiorities in the crossed section of material science and digital imaging science.’ In fact, Kodak is incomparable in the two fields of technology and intellectual property. This core strategy may be regarded as the continuation of Kodak’s advantages, and the core of this core strategy is to develop commercial products,” said Mr. Xu.
By Kevin Nie, China IP
(Translated by Hu Xiaoying)
