Eastman Kodak announced today that it is phasing out production of digital cameras, pocket video cameras, and digital picture frames.
This doesn't spell the end for Kodak-branded devices—the company plans on licensing its logo to third-party manufacturers of these products. Kodak expects to save $100 million annually by making this move, although it expects to pay out approximately $30 million in severance and other separation benefits to facilitate this exit. The company introduced two new cameras at CES last month, but according to Kodak they are unlikely to make it to market.
Kodak, which filed for bankruptcy protection on Jan. 19th, plans to concentrate its production efforts on more profitable aspects of its business. This move is not entirely surprising. Some industry analysts identified Kodak's ho-hum digital lineup as a necessary casuality in the fight for the company's survival. Despite having invented the digital camera in 1975, competitors like Nikon, Canon, and Sony have been better at implementing the technology in finished products than the Rochester-based institution.
The company's consumer arm plans to focus its efforts on products and services that will help its customers share photos via physical prints and online services. This includes more than 100,000 Kodak retail kiosks installed in storefronts around the world, and nearly a third of these support connectivity to online photo-sharing sites. Kodak also plans to stay in the inkjet printer business, and will continue to develop applications for Facebook and the Kodak Gallery web site for online sharing. It will also continue to give consumers the tools necessary to create photo books, greeting cards, and calendars. Even though the company won't be producing any more cameras, it will continue to make batteries, smartphone chargers, and camera accessories, which are products that traditionally have high profit margins.
Even though Kodak's most famous product—Kodakchrome—is no longer produced, the company still produces color negative, black and white, and color slide film, as well as photographic paper. The film business remains profitable for Kodak, and the company plans to continue to provide materials to analog photographers, photofinishers, and professional photo labs. According to Eric Joseph, vice president of film retailer Freestyle Photographic Supplies, sales of Kodak film saw a 20 percent increase in 2011.
For more information on digital cameras, check out the Digital Cameras Product Guide for the latest reviews, and The 10 Best Digital Cameras, for the top cameras we've tested.