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Kodak Dumps Digital Hardware

Rochester, N.Y. –

Eastman Kodak

said Thursday it will no longer sell photo hardware, as the struggling company
tries to stay afloat.

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.