Kodak Dumps Digital Hardware

By Greg Tarr -- TWICE, 2/9/2012

Rochester, N.Y. - Eastman Kodak said Thursday it will no longer sell photo hardware, as the struggling company tries to stay afloat.Kodak's logo through the years.The company said it is phasing out its dedicated capture devices business consisting of cameras, pocket video cameras and digital picture frames in the first half of 2012.

"Kodak will instead expand its current brand licensing program, and seek licensees in these categories," the company said in a statement. "Following this decision, Kodak's Consumer Business will include online and retail-based photo printing, as well as desktop inkjet printing."

Kodak said retail partners have been notified as it begins the "orderly transition."

Kodak said it will continue to honor all related product warranties, and provide technical support and service for its cameras, pocket video cameras and digital picture frames.

"For some time, Kodak's strategy has been to improve margins in the capture device business by narrowing our participation in terms of product portfolio, geographies and retail outlets," said Pradeep Jotwani, Kodak consumer businesses chief marketing officer.

Upon completion of the phase out, Kodak said it expects to achieve annual operating savings of more than $100 million. The company will incur a charge related to separation benefits of approximately $30 million resulting from the exit of the business.

Kodak continues to operate a commercial businesses segment, including digital and functional printing, enterprise services and solutions, and graphics, entertainment and commercial films units. Kodak said its digital businesses now comprise approximately three-fourths of total revenues.

Kodak will seek to capitalize from digital imaging through a broad range of photo products, from prints to photobooks and photo greetings.

Continuing consumer products and services will include: retail-based photo kiosks and digital dry lab systems; consumer inkjet printers; Kodak apps for Facebook; Kodak Gallery; Kodak camera accessories and batteries; and traditional film capture and photographic paper.