Vince Barabba recounts from 1981, when he was Kodak’s head of market

intelligence. Around the time that Sony SNE +0% introduced the first electronic
camera, one of Kodak’s largest retailer photo finishers asked him whether they
should be concerned about digital photography. With the support of Kodak’s
CEO, Barabba conducted a very extensive research effort that looked at the core
technologies and likely adoption curves around silver halide film versus digital
photography.
The study’s projections were based on numerous factors, including: the cost of
digital photography equipment; the quality of images and prints; and the
interoperability of various components, such as cameras, displays, and printers.
All pointed to the conclusion that adoption of digital photography would be
minimal and non-threatening for a time. History proved the study’s conclusions
to be remarkably accurate, both in the short and long term.
The problem is that, during its 10-year window of opportunity, Kodak did little
to prepare for the later disruption. In fact, Kodak made exactly the mistake that
George Eastman, its founder, avoided twice before, when he gave up a profitable
dry-plate business to move to film and when he invested in color film even though
it was demonstrably inferior to black and white film (which Kodak dominated).
There are few corporate blunders as staggering as Kodak’s missed opportunities
in digital photography, a technology that it invented. This strategic failure was
the direct cause of Kodak’s decades-long decline as digital photography
destroyed its film-based business model. Kodak management’s inability to see
digital photography as a disruptive technology, even as its researchers extended
the boundaries of the technology, would continue for decades. As late as 2007, a
Kodak marketing video felt the need to trumpet that “Kodak is back “ and that
Kodak “wasn’t going to play grab ass anymore” with digital.
The results of the study produced both “bad” and “good” news. The “bad” news
was that digital photography had the potential capability to replace Kodak’s
established film based business. The “good” news was that it would take some
time for that to occur and that Kodak had roughly ten years to prepare for the
transition.
Meanwhile, the financial crisis of 2008 and the resulting plunge in interest rates
left some of the company’s pension obligations underfunded. It was those
obligations, along with other costs, that Mr. Perez said eventually resulted in the
January 2012 bankruptcy filing.
Revenue dropped from about $13.3 billion in 2003 to $6 billion in 2011.
Under court oversight, Kodak continued to reduce costs, businesses and workers.
It closed its consumer camera business and sold an online photo service. It spun
off its personal and document imaging businesses to its pension plan and sold
many of its patents. It took its name off the theatre that hosts the Academy Awards
each year.
Much of Kodak is gone except for its commercial and packaging printing
businesses. The company emerged from bankruptcy with about 8,500 employees,
just a fraction of the 145,000 it had at its peak in the 1980s. Revenue is expected
to total $2.7 billion this year.

Timeline: 128 years of Kodak

1884 American inventor George Eastman, who later becomes founder of the Eastman Kodak
Company, patents photographic film stored in a roll.

1888 The Kodak name is trademarked. The first Eastman Kodak camera is released and costs
around $25 (about £400 in today's money).

1891 The company opens its first international manufacturing site in the London suburb of
Harrow, taking advantage of Europe's booming photography market.

1900 Kodak launches the Brownie camera, priced at $1, which is credited with bringing
photography to the masses.

1922 Kodak produces 147,000 miles of motion picture film a year, using one-twelfth of the
silver mined annually in the US.

1925 George Eastman, now 71, hands over presidency of the company to William Stuber.

1969 The film used on the Apollo 11 Moon landing is manufactured by Kodak.

1975 Kodak becomes the first company to make a digital camera. It took 23 seconds to
expose each image.

1976 More than 90 per cent of photographic film and more than 85 per cent of cameras sold
in the US are made by Kodak.

1994 One of the first consumer digital cameras, the QuickTake, is launched by Apple. It is
made by Kodak.
2004 As the popularity of digital cameras grows, Kodak finally abandons the film camera.

2005 Kodak is the largest digital camera retailer in the US, raking in up to $5.7bn in sales.

2007 Kodak falls to fourth biggest digital camera retailer. By 2010, it is the seventh biggest.

2009 After 74 years of production, Kodak stops selling 35mm colour film.

2011 Kodak shares fall by more than 80 per cent, partly because the company struggles to
meet pension costs for its employees.

2012 Kodak files for chapter 11 bankruptcy.