Kodak puts new spin on camera business
Eastman Kodak Company is planning to take the photographic market for a whirl with its new disk camera and film.
The move is a classic Kodak ploy. Every 10 years or so, Kodak shakes up its competitors by introducing cameras incorporating new technology. The new offerings - like Instamatic cameras in 1963 and pocket cameras in 1972 - boost Kodak's sales and force other camera and film makers to spend months scrambling to catch up.
''Their Japanese competition could drop in the ocean and every 10 years they'd still bring out a new camera,'' quips Ty Govatos, a Bache Halsey Stuart stock analyst.
The photographic giant's well-oiled marketing machine is at it again, this time trumpeting the advantages of disk photography. At a press conference earlier this week, Kodak board chairman Walter Fallon billed the company's new photo system as ''the biggest innovation in amateur photography'' since Kodak launched its Instamatic line almost 20 years ago.
The technology is unique. The film for the new camera line comes on a small disk containing 15 fingernail-size pieces of color print film. The disk, enclosed in a light-tight container, is inserted into a super-thin 0.8 -inch-thick camera about the size of an index card.
Electronic circuits in the camera automatically set the exposure and shutter speed for each picture, control the built-in flash, and advance the film disk for the next exposure. The three models of the disk camera, which will go on sale in May, range in price from $67.95 to $142.95. The film disk will retail at
The disk products are expected to breathe some life into a photo market sagging under the effects of recession and aging products. Disk technology ''will stimulate the whole market,'' says Eugene G. Glazer, a Dean Witter Reynolds Inc. vice-president. ''The consumer has been operating with an old generation of Kodak products and losing interest.''
''There will be a definite kick in the market, although it may be relatively short lived,'' adds John Crandell, operations manager at Underground Camera, a chain of New England camera stores.
The new cameras may also make it tougher for electronics firms to market cameras that store snapshots electronically rather than on film. ''The progress made in film technology and speed with this system may postpone Sony's electronic camera,'' says Reginald Duquesnoy, a Merrill Lynch vice-president. The Sony Mavica, slated to hit the market next year, stores images on magnetic tape and can take both still shots and movies.
Kodak's new line at least provides a moving target for video technology to hit. And the Rochester, N.Y., concern has developed a method for allowing disk camera pictures to be viewed on a television screen. ''Kodak does have capability'' to offer such a product, a company spokeman says. But the attachment allowing disk pictures to be viewed on a TV is not expected to enter the market for a number of years.
The three cameras and color print film disk will come to the market later this year with all of Kodak's marketing and distribution muscle behind them. The company plans ''the largest advertising campaign in its 101-year history,'' J. Phillip Samper, general manager of Kodak's photographic marketing group, said in a prepared statement. The advertising expenditures will likely raise Kodak's share of both the camera and film markets. Analysts say Kodak now commands 85 percent of the film market and 40 percent of the camera business.
How much Kodak can increase its share of these two markets will depend on the speed with which its competitors can copy the new format.
The time it takes to copy a Kodak move has been declining. ''Two or three years ago it took six months,'' says Mr. Govatos. ''Now it is about six seconds. You will see announcements soon'' from other companies.
Still, competitors are taking a cautious public stance. Fuji USA, Kodak's most aggressive opponent in the film market, ''will work on all new systems which give the customer a new choice,'' says Fuji's chief operating officer, Bernie K. Yasunaga.
For Kodak and its competitors, new film products are more profitable than cameras. Kodak earns margins of around 30 percent on cameras, according to Mr. Duquesnoy at Merrill Lynch, while sensitized materials like film and printing paper sport profit margins of 50 to 60 percent.
And the new camera system should help sales of those high-profit sensitized materials. As a result of advances in technology, the disk system should boost the number of good or excellent pictures by 25 percent, Kodak says. So photofinishers should be able to print a larger portion of snapshooters' pictures. This means more paper and film sales for Kodak and higher picture printing fees for photofinishers.
Fatter printing fees will be welcomed by the photofinishing industry, which was hit by a ''flattening of volume'' last year, says Craig Halverson, director of industry relations for the Photo Marketing Association International, the photofinishers' trade group.
Of course, to garner these higher printing fees, finishers will have to invest in new film handling equipment Kodak is offering or competitors may introduce.
At least initially, photo labs will not have to purchase equipment to handle slide film, since Kodak says it has no plans to offer such a product. Notes Duquesnoy, ''Under 5 percent of the pictures taken in the US are slides. I don't think Kodak is going to bother'' with slide disks.
Eastman Kodak Company at a glance 1981 sales (est.; $10.7 1981 net income (est.) 1.3 billion 1980 shareholder equity return 19.1% Numbers of employees 129,500 Headquarters: Rochester, N.Y. Source: Moody's Investors Service; Merrill Lynch estimates