So, big name Kodak has gone bankrupt. Most people think of photographic film when they hear the name Kodak. But Kodak was and is more than an enterprise involved in photography technologies. It has an established name in printing as well with its NexPress printing presses. The only problem is that it’s not making a lot money in that market either.
If and when Kodak relaunches, it will find it easier than before to raise capital needed to install a big enough base of digital printers to eventually be profitable.
The plan of Antonio Perez, chairman and CEO of Eastman Kodak is to place printers with high volume users today — sometimes at a loss — and profit from ink and service sales tomorrow. That strategy to date has cost more money than it has made.
Kodak has one tump card up its sleeve to make this a viable proposition: its inks are made of longer lasting pigments, unlike the watery dye used in most devices, allowing quicker drying and smaller machines.
This should allow Kodak to compete in markets such as digital printing, packaging, functional printing, and materials.
In the same spirit, Kodak could also grab a share of the consumer inkjet printer market by designing cheaper replacement cartridges. Whether Kodak will succeed in its plan to penetrate markets such as materials printing, will largely depend on its ability not to reinvent the wheel. Why would Kodak not focus on ink development for companies such as VUTEk? By developing products — perhaps even alternative inks and accessories — for companies like VUTEk and others in those markets, Kodak’s knowledge in this area could be worth licensing.
But Perez is quoted saying he wants to dominate commercial printing of magazines, books, newspapers and advertising with high volume inkjet machines that are faster and digitally flexible, to deliver smaller and more customized batches cheaper than old-tech presses and plates as the world moves toward on-demand publishing.
In these markets he will run against established companies such as Agfa Graphics, who are struggling themselves to keep their head above water.
Analyst Amer Tiwana of CRT Capital Group has also been quoted saying he is skeptical about the plans as most major paper producers have already gone through bankruptcy, and consumer printers, like digital cameras, are becoming a commodity.
Kodak’s answer is to revolutionize product packaging, an area “immune to digital substitution,” Perez said in his chairman’s letter in the 2010 annual report. The company is promoting its Flexcel technology, which can print quickly on diverse materials.
But for now, the bankruptcy may give Kodak what it needs the most: the ability to find buyers for some of its 1,100 digital patents, a major portion of its value.