Eastman Kodak

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EASTMAN KODAK

Headquartered in Rochester, New York, the Eastman Kodak Company was one of the leading image photography businesses in the United States. The company had eight major divisions: Consumer Imaging; Kodak Professional, Digital and Applied Imaging; Entertainment Imaging; Health Imaging; Commercial and Governmental Systems; Business Imaging Systems; Office Imaging; and Global Customer Service and Support. Kodak was the top U.S. manufacturer of 35-millimeter (mm) film, capturing close to 75 percent of the market at the end of 1998 and 70 percent at the beginning of 1999. But Kodak shared the lead with Fuji Photo in worldwide film sales. Kodak also manufactured cameras, information systems (including writable CDs and software), and medical imaging technology.

The Eastman Kodak Company traces its origins to 1881 when George Eastman (1854–1932) founded the Eastman Dry Plate Company. A bank clerk from Rochester, New York, Eastman had spent three years developing the dry-plate photography process, which was a vast improvement over the sloppy and awkward wet-plate process in use at the time. Determined to develop a camera that was as easy to work as a pencil, Eastman next produced a film consisting of gelatin coated paper packed in a roll that could be used in any dry-plate camera. In 1884 the company changed its name to Eastman Dry Plate and Film Company.

In 1888 the company introduced the first readily portable camera. Selling for $25, the camera held enough rolled film for 100 photographs. Customers developed the film by sending it back to Rochester, where the company printed the photographs and refilled the camera with a new roll. The product was advertised with the slogan, "You push the button, we do the rest." The small sized, easy to use camera revolutionized photography by opening it up as a hobby to thousands of people.

In 1892 Eastman renamed his business again, calling it the Eastman Kodak Company. Eastman chose the name "Kodak" after experimenting with combinations of letters starting and ending with the letter "k," which the founder thought was a "strong, incisive sort of letter." In addition, to register his cameras for trademark protection in Britain, Eastman needed to use a word that did not already exist in the English language. By 1897 Eastman Kodak had manufactured 100,000 cameras, but Eastman wanted to make photography more convenient and less expensive. In 1900 he did so, introducing the first Brownie Camera. It sold for $1 and used a 15-cent roll of film.

During the next two decades Eastman Kodak continued introducing new products and technologies. In 1902 it offered a machine that developed film without a dark room. During World War I (1914–1918) Eastman Kodak developed products to help U.S. troops fighting in Europe, including aerial cameras and an unbreakable lens for gas masks. In the 1920s Eastman Kodak rolled out 16-mm motion picture film, a 16-mm motion picture camera, and the Kodascope projector. Despite George Eastman's death by suicide in 1932, Kodak continued to thrive. In 1935 the company introduced Kodachrome film, the first commercially successful amateur color film.

Kodak's success, however, was not without some mistakes in judgment. During the 1940s the company rejected Edwin Land's offer to have Kodak market the instant camera he had invented. Land later went on to found a firm that competed with Kodak, the Polaroid Corporation. Bouncing back in the 1950s, Kodak brought out the inexpensive Brownie hand-held movie camera and the Brownie projector. In 1953 Kodak formed the Eastman Chemical Products Company to produce chemicals, plastics, and fibers used in film production, poising itself to serve the burgeoning new market of photofinishing. Five years later Kodak unveiled the first fully automated slide projector.

In 1963 Kodak again revolutionized amateur photography with its introduction of the Instamatic camera that used a film cartridge instead of a roll, eliminating the need to load film in the dark. Within ten years Kodak had launched five different, immediately successful pocket models of the Instamatic. By 1976 the company had sold about 60 million such cameras, 50 million more than the nearest competitor.

Kodak's commercial success was tempered by its legal setbacks. In the early 1970s several smaller companies filed a series of antitrust lawsuits, alleging that Kodak had illegally monopolized the photography industry. The most famous of these cases involved Berky Photo, which accused Kodak of conspiring with Sylvania Companies and the General Electric Company in developing two photographic flash products. The case was settled for $6.8 million in 1981. Kodak also lost a patent infringement suit instituted by Polaroid during the 1980s. As a result, Kodak was forced to pay $925 million in damages, cease production of instant cameras, and recall all instant cameras that had been sold to customers. In 1997 the World Trade Organization (WTO) denied Kodak's claim that it had been refused fair access to Japanese markets.

As its market share began dwindling in the 1990s, Kodak took several actions to reverse its fortunes. The company first began selling its peripheral businesses in chemicals, pharmaceuticals, and household products. Kodak then refocused its energies on its core imaging business, investing heavily in digital photography. In 1992 Kodak introduced the Photo CD system, allowing photofinishers to record 35-mm images on compact discs, and enabling customers to view the images on their televisions and personal computers.

Kodak also formed a strategic research alliance with some of its competitors, including Fuji Photo, Canon, Inc., Nikkon Corporation, and Minolta, Co., Ltd. This endeavor resulted in the 1996 release of the Kodak's Advanced Photo System (APS), featuring a drop-in film cassette, a choice of print formats, and improved picture quality. But sales continued to decline, and in 1997 Kodak announced a restructuring program whereby it would reduce the company's workforce by 20 percent before the end of the century. By 1999 Kodak could boast that it manufactured a line of digital cameras among the best in the world. But the cost of such cameras, between $700 and $1000, was too high for most consumers.

See also: George Eastman