What Apple Learned from Kodak

News Type: Event — Seeded on Mon Dec 8, 2008 10:41 AM EST

Article Source: Business Week

technology, apple, ipod, ipods, kodak, aapl, jonathan-ive, walter-dorwin-teague

In 1926, Kodak launched the third generation of their Vest Pocket camera line, the Series III. While the product line had been very successful, they wanted to expand its market appeal, in particular, to women. To help them with this, they turned to the designer, Walter Dorwin Teague, who had recently set up one of the first industrial design consultancies in the USA. The concept that he developed was to do a version of the camera that would be released in five distinct and different colours, packaged in a satin-lined box of matching colour. (All previous Vest Pocket Cameras had been solid black.) This version of the camera was released in April, 1928 under the name, the Vanity Kodak.

Leaping ahead to 2003, Apple Computer had just launched the third generation of their iPod MP3 music player. While the product line had been very successful, they wanted to expand its market. To do so, they turned to their head of industrial design, Jonathan Ive. The concept that he developed was to do a smaller version of the iPod, and release it in five distinct and different colours. (All previous iPods had been solid white.) This version of the iPod was released in January, 2004 under the name, the iPod Mini.

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6.3

2.1

{"commentId":4342453,"authorDomain":"michaelsautter"}

Michael Sautter

So what happened to Kodak?
What's the lesson to be learned from Kodak's slow decline?

{"commentId":4342453,"threadId":"438102","contentId":"2191132","authorDomain":"michaelsautter"}

1 vote

#1 - Mon Dec 8, 2008 11:13 AM EST

{"commentId":4343351,"authorDomain":"masternav"}

MasterNav

Kodak was dependent upon a technology which developed a discernable end-of-life window (film processing technologies) that were directly impacted by digital technologies to which it could not effectively adapt. The last vestiges were in the medical imaging field, which was slower to take up digital technologies, due to lack of resolution compared to film. That has been rectified and film technology is going the way of the steam engine.

{"commentId":4343351,"threadId":"438102","contentId":"2191132","authorDomain":"masternav"}

2 votes

#2 - Mon Dec 8, 2008 12:03 PM EST

{"commentId":4343597,"authorDomain":"michaelsautter"}

Michael Sautter

Haven't other companies survived a shift in technology?

{"commentId":4343597,"threadId":"438102","contentId":"2191132","authorDomain":"michaelsautter"}

1 vote

#2.1 - Mon Dec 8, 2008 12:17 PM EST

{"commentId":4344964,"authorDomain":"sobriquet"}

Sobriquet

The shift was easy for Canon and Nikon, lenses and cameras remain pretty much the same. All they have to do is source the CCDs from someone.

Kodak probably had a harder transition, because film and digital are very different technologies for capturing images. I think Kodak's digital efforts just amounted to "too little, too late."

Can you give any other companies that have survived a shift in technology? I think the ones that do best are in fact the ones driving the shifts.

{"commentId":4344964,"threadId":"438102","contentId":"2191132","authorDomain":"sobriquet"}

1 vote

#2.2 - Mon Dec 8, 2008 1:31 PM EST

{"commentId":4345284,"authorDomain":"michaelsautter"}

Michael Sautter

Just off the top of my head:

IBM: mainframes > PCs > IT services

HP: electronic testing equipment > calculators > PCs & printers > IT services

GE: electricity & related equipment > chemicals, mutual funds, consumer electronics

NBC & CBS: radio > TV

Apple: PCs > portable music players & cell phones

{"commentId":4345284,"threadId":"438102","contentId":"2191132","authorDomain":"michaelsautter"}

1 vote

#2.3 - Mon Dec 8, 2008 1:51 PM EST

{"commentId":4360951,"authorDomain":"masternav"}

MasterNav

Actually Michael IBM still derives most of their profits form mainframe or "bigiron technologies, and the PC thing was not a significant chunk of their business - otherwise they wouldn't have sold off to Lenovo. Even their services arm is driven from their big iron. HP is closer to the mark. GE actually diversified early on as technologies they developed found applications in other markets: turbines used for electrical generation became flight engines and gasline compressors, as well as railroad engines. It was well within their market spec to develop appliances that used the electricity they were generating, so their development was less single tech driven than diversifying along the logical path from their root tech. I think it is important to look at diversification and evolution to reduce single-path reliance - which Kodak did not do.

{"commentId":4360951,"threadId":"438102","contentId":"2191132","authorDomain":"masternav"}

3 votes

#2.4 - Tue Dec 9, 2008 3:21 PM EST

{"commentId":4345554,"authorDomain":"jamesmirick"}

Jim Mirick

Part of Kodak's problem was that their whole model was built around supplying the materials on an ongoing basis for taking and processing photographs. Cameras were almost giveaways to them, their focus was on film, paper, and developing chemicals.

Digital imaging, however, has only an output medium, often it can be plain paper and more often it's just a file sent to someone. You don't "use" memory sticks like you do film and paper, so where's the part for Kodak to play? Maybe some paper, but that's minor compared to what they were doing before.

And remember, in the history of photogrtaphy the shifts had been within different versions of metal-and-chemical technology -- from cyanotypes, or platinum, to silver, from wet-plate to gelatin film, etc. This was a completely new paradigm (an overused word) where there simply were no materials to be purchased and where there were plenty of companies who were well-entrenched in the new technologies.

{"commentId":4345554,"threadId":"438102","contentId":"2191132","authorDomain":"jamesmirick"}

2 votes

#3 - Mon Dec 8, 2008 2:07 PM EST

{"commentId":4356788,"authorDomain":"ignatz-horowitz"}

Ignatz Horowitz-657495

Kodak actually produced the first pro-level digital camera (using a Nikon F-3) back in 1991. They should have had the foresight to ditch film (although there are folks who still use it); they could have been far ahead of the field instead of dragging @ss.

{"commentId":4356788,"threadId":"438102","contentId":"2191132","authorDomain":"ignatz-horowitz"}

1 vote

#4 - Tue Dec 9, 2008 11:22 AM EST

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MICHAEL SAUTTER

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What Apple Learned from Kodak

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