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Eastman Kodak's corporate headqaurters in Rochester, N.Y.
By msnbc.com staff and wire
The company that invented home photography has tossed in the towel on it.
Eastman Kodak, the bankrupt inventor of the hand-held camera, plans to stop making digital cameras, pocket video cameras and digital picture frames in the first half of 2012 in a bid to cut costs.
The decision marks the end of an era for Kodak, which filed for bankruptcy protection last month and is seen as one of the biggest corporate casualties of the digital age, after it failed to quickly embrace modern technologies such as digital photography, a product that it also invented.
Mark Kaufman, an investment consultant at MLK Investment Management, isn’t surprised by the move. He points out that since the company made it known that it wanted to sell its patents to commercial technology it doesn’t make sense for Kodak to stay in that business.
“They never really made money on cameras,” he said. “They made money on licensing the technology to third parties.”
Commercial printing technology makes up around 70 percent of Kodak’s business now, Kaufman added, and in that area they have a chance to capture a growing overseas market, especially given Kodak’s new high-speed printing system that generates 90 million pages per month.
“This business has been losing money for them, mainly because U.S. printers have been slow to adopt it, but there is a big potential overseas,” he said, noting that printers in places like India and Eastern Europe where growth is strong and the existing print machinery is antiquated and in need of modernization.
Kodak said Thursday that its plan to stop making cameras and frames would mean “significant” job losses at the business, which employs 400 people, mostly in Rochester, N.Y.
Kodak will take a charge of about $30 million to leave the business. It expects the exit to generate more than $100 million in annual operating savings. The charge does not include additional costs that Kodak expects to incur for items such ending manufacturing contracts with overseas companies that make its products.
Reuters contributed to this report.
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