|
Another Kodak
moment
______________________________________________________
By Maurice Barnfather, Editor,
Big Money Watch
In 2006, Konica Minolta made its last
camera. After more than 100 years the Japanese company, which is also the world's third-largest producer
of photo film, began a complete withdrawal from the photography business. In future it will stick to
making photocopiers, printers and medical devices. The company was the victim of the wholesale change
brought to an entire industry by the digital camera.
Other big names in the photography business
have suffered badly in the digital age. Eastman Kodak (Ticker: EK) has racked up losses as it has struggled
through a restructuring. Like Japan's Fuji Photo Film, which after EK is the world's second-largest film
supplier, it has seen revenues from its traditional business collapse much faster than was expected.
In little more than a decade, sales of
digital cameras have soared; they have now almost completely replaced film cameras. But now even digital
cameras are rapidly becoming a “mature” consumer product. EK has managed to maintain market
leadership over Canon and Sony in America thanks largely to its decision to specialize in easy-to-use
digital cameras, often sold complete with a home photo-printer. But it needs to persuade people to trade
up.
To offset its losses, EK has also expanded
aggressively into digital-photo kiosks. These are proving popular with consumers, who find them an easy
and cheap way of obtaining prints. But here, too, competition is also getting hotter.
How many people still print pictures?
Billions of images never make it on to paper, but are simply e-mailed to friends or shared on websites.
Yet with so many digital pictures being taken, a big market may well develop for storage and archiving
systems, both online and offline. No one, it seems, is really sure just how long digital pictures will
survive stored on conventional hard-drives or burned onto CDs. If people want their memories to last
long into the future, they may have to buy or subscribe to new products and services.
And now a new threat has appeared: camera-equipped
mobile phones. These have changed the nature of photography entirely, because they make sharing digital
snaps far easier – and they are outstripping both film and digital cameras.
With EK in a restructuring mode for a
number of years, its stock has been a poor performer. Indeed, this year EK has slumped 34.4%. But one
mutual fund manager has been aggressively buying the shares and has a plan to return capital to shareholders.
Find out which mutual fund thinks EK is undervalued, and whether you should follow it into the stock,
in Big Money Watch.
Trade
Smarter Using the latest Insider Trades
Is the CEO selling off? Has a key insider loaded up on shares before a big
price jump?
Find out now. Get your free download of Real Time insider trades:
http://www.realtimeinsider.com/weekly.aspx?aid=802
|
