Kodak's Perez Pitches Partners, Paradigm Shift

By Greg Scoblete -- TWICE, 1/16/2006

LAS VEGAS — Eastman Kodak chairman/CEO Antonio Perez took to the podium at the International CES Industry Insider series, here, to demolish the last foundations of the analog photography mansion his company did so much to build.

“Digital cameras are dinosaurs, not evolving as fast as the ecosystems around them,” Perez asserted. Rather than embrace new technology, the industry has been encumbered by its analog past, simply swapping “silicon for silver,” Perez added.

To break free, Kodak will seek broad industry partnerships to enable to seamless transmission, organization, archiving and sharing across every device and platform and will redefine what it means to be a digital camera, Perez said.

The company's first such partnership, with Motorola, was announced the first night of CES. The 10-year cross-licensing and marketing deal will supply Motorola with Kodak CMOS sensors and will integrate Motorola devices with Kodak products, such as its printer docks, retail kiosks and online services. The companies plan to co-develop other mobile imaging applications and products as well.

Motorola CEO Ed Zander joined Perez on stage to celebrate the liberation of billions of digital images currently languishing in camera phones. “We need a way to move these images out of the cameras and let the consumer use and enjoy them,” Zander said.

Perez also noted his company's partnership with PC-VoIP service Skype to embed the calling platform on Kodak's EasyShare Gallery Web site.

Moving imaging out of the analog past will entail creating imaging devices that no longer rely on single lenses or traditional optics and that embed facial recognition and GPS technology into an image's metadata, Perez said. The new era would also turn the flash from a “crutch” to a “creative tool” and will use advanced processing power to identify and fix photo problems before a consumer even loads the images onto a PC.

Perez said Kodak was guided by five “rules” in its product development. First, full ownership of digital images belongs to the consumer. “They must be able to access all their digital content whenever they want from wherever they want without limitation,” he said. Second, Kodak's “you push the button, we do the rest,” mantra must be a reality, enabling the consumer to easily achieve a quality image. Third, sharing images must be easy. Fourth, archiving images must be easy and permanent, and, finally, images must be truly portable.

To kick-start the paradigm shift, Perez said Kodak would leverage its extensive portfolio of intellectual property, fill in any IP gaps with cross-industry partnerships and wield its century-old brand to convince consumers to embrace digital photography.

“We will focus on three game changers to move the market,” Perez said. “Flawless imaging” — where the scene seen is the photo captured — will be enabled by Kodak's Perfect Touch software. “Intelligent content” with Kodak's E-Finder technology will replace the “tragedy of the shoebox” with a searchable, intuitive digital archive capable of self-organization that is both “interconnected and self aware,” Perez said.

Finally, “semantic understanding” will be achieved with Kodak E-Moment, “a rules-based system that learns with every use to make pictures learning organisms” remember how a consumer used them to simplify future tasks.

Kodak To Broaden EasyShare Ecosystem

Implementing chairman/CEO Antonio Perez's vision will fall, in part, to consumer digital imaging group president Philip Faraci. Faraci sat with TWICE for an interview after Perez's Insider presentation.

Though Perez's presentation sketched ambitious goals, both for Kodak and the industry, Faraci insisted they were manageable. “We've had facial recognition and GPS technology under development for years.” These were not developments for five years down the road but “for the next year or two.”

Harnessing an image's metadata — information stored within the JPEG image file — will play a large role in how Kodak tackles the digital shoebox, Faraci said. “Today we throw away most of the image data from our pictures. There is a lot more we can do with it.”

The preponderance of repeat buyers has moved Kodak into more feature-rich, higher-ticket offerings than in year's past. The company's first Wi-Fi-enabled model, the EasyShare One, just hit store shelves for the holiday selling season “and did well with certain customer segments,” Faraci said. Kodak will build off the product in 2006, he added. The ecosystem which surrounds the EasyShare One, Kodak's EasyShare Gallery Web site from which consumers can upload and e-mail images right from the camera, will be expanded to encompass competing print providers, Faraci said.

“You have to have a system that works for all types of consumers, they want choice,” he said.

While his competitors scramble to break into the expanding digital SLR market, Faraci wondered whether “it was the right format for the digital age. It doesn't do video. It's a film system. Why have interchangeable lenses, why not put them all-in-one camera?”

With analysts predicting a slow down in the torrid pace of camera adoption, Faraci was confident that “imaging” as a whole would continue to expand. “You may see the market for 'boxes that takes pictures' shrink, but I think you'll see a 50-fold increase in the number of devices capable of taking a digital photo in 10 years.”

Perez's speech was notable for the relative lack of emphasis paid to one factor critical to Kodak and its retailer customers: hard copy output. Faraci said that the print “will be an important part” of the new imaging architecture Kodak is laboring to build. In an era of digital sharing and display, printing could decline, Faraci admitted, but could just as easily rebound, riding the crest of better printing technology and increased image taking.

While Kodak sits near or atop most digital camera market share surveys, Faraci would like to see improvements in the company's “go-to-market strategy” in its global execution. “We've embraced e-channels,” Faraci added, “but not as well as we could.”

As for the embattled photo specialty channel, “they are allowing themselves to go extinct” by not “demystifying” digital imaging, he said.