The end of Kodak

The end of Kodak

Is Kodak going to survive much beyond 2012? Don't hold your breath.

The US International Trade Commission has agreed with a judge who previously dismissed claims that Apple and Research In Motion, makers of the Blackberry, infringed on Kodak's patents. It's not a complete loss – the commission did find that Apple and RIM partially infringed. Still, the chances that Kodak will recover $1 billion, which is what the company was aiming for, seem about as hopeful as snowball's chances in hell.

The ruling to relates to cameras embedded into smart phones like iPhone and Blackberry.

Effectively the ITC has now sent the matter back to the administrative law judge, where it will be tied up for some time heading nowhere. Think about it – If you have an iPhone or another smart phone, why would you go out and buy a digital camera or an old-school film camera? And therein lies the problem for Kodak.

Kodak generated most of its profits from the highly lucrative film business in the 20th century. But with the emergence of digital technology, its film business has been heading to hell. It's dead, Kodak is just waiting to call the undertaker.

Citi analyst Richard Gardner says there are a few other things that will make Kodak's survival problematic: 25-year high silver prices are raising producer costs, sales are falling because of high camera inventory, people aren't buying point-and-shoot cameras anymore, printing plates are getting cheaper and growth businesses like inkjet printers will not be profitable for some time.

Kodak might get through next year. But don't expect it to be around for much longer. Another industry giant will go under because it failed to adapt to changes in technology and consumer patterns. Newspapers are next.


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