Hurting Kodak sees salvation in ink jets
July 29, 2009 by Sam NarisiPosted in: Dealers & Channel, In this week's e-newsletter, Latest News & Views
Eastman Kodak, long the victim of the collapse of the traditional film-based photography business, has been trying for years to build up its digital presence.
Its stock price is at a historic low. Its sales declined by 24% in the fourth quarter of last year and by 29% in the first quarter of this year. And while it has done well in the very competitive digital camera business, prices are way down and demand is weak.
According to a recent article in the Wall Street Journal, the company is pinning ever more of its hopes on — printers.
The company is still a tiny player in the desktop inkjet field, where Hewlett-Packard is by far the dominant player. According to the Journal story, the company has around a 1% share of the all-in-one market worldwide. While Kodak’s machines have an inviting cost-per-page proposition, they have higher-than-rock-bottom sticker prices. Many home buyers are clearly more interested in short-term rather than long-term savings.
The good news for Kodak is that its customers are buying cartridges at twice the industry average, at around eight a year instead of the usual four. If Kodak can find a way expand its base, it might derive an excellent revenue stream.
In a maybe even more promising development, Kodak plans to soon release its production-oriented high-speed inkjet printer called Stream. This machine, which is just being released, promises offset-quality output. These machines are a step beyond Kodak’s current high-speed inkjet machines in the Versamark series. With a speed of 500 feet a minute and reportedly professional color quality, the Stream devices may be a winner in the commercial printing market. The printers use new technology for both ink delivery (printheads) and for ink drying, and Kodak is clearly hoping that they can be a replacement for offset presses in some applications.
For now, Kodak still has a reasonable amount of cash on hand. It’s betting that being a leader in the rapidly evolving ink jet market will give it the ability to keep afloat, even though it can never match the glory years.
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Tags: Eastman Kodak, Stream
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