You’re right about Kodak’s moves into digital, of course. I guess I should have been more specific. Where they fell behind is in the core market they created with the Brownie – the camera for everyone. They ceded this market to others, not necessarily the technology, but the market. Even putting SLRs aside, the compact digital camera (the new Brownie) market is huge. Kodak didn’t keep up.

You’re right about Kodak’s moves into digital, of course. I guess I should have been more specific. Where they fell behind is in the core market they created with the Brownie – the camera for everyone. They ceded this market to others, not necessarily the technology, but the market. Even putting SLRs aside, the compact digital camera (the new Brownie) market is huge. Kodak didn’t keep up.

Two, I’m not sure it is fair to say kodak was late to digital. I believe they were the first to build a commercially practical digital camera for press photographers. Basically a Nikon F body camera with a few pounds of imaging, storage and processing hardware slathered in/on the body. At $30K for a 1.3 Mp camera, it was quite the bargain;-). They continue to be an important player in the imager chip business. Constant development of high technolgy products (digital cameras), vs repeat business for a stable product/service (film and developing), that’s a difficult business model makeover. The fact that they are still in the game is actually pretty impressive if you ask me.
John

Two, I’m not sure it is fair to say kodak was late to digital. I believe they were the first to build a commercially practical digital camera for press photographers. Basically a Nikon F body camera with a few pounds of imaging, storage and processing hardware slathered in/on the body. At $30K for a 1.3 Mp camera, it was quite the bargain;-). They continue to be an important player in the imager chip business. Constant development of high technolgy products (digital cameras), vs repeat business for a stable product/service (film and developing), that’s a difficult business model makeover. The fact that they are still in the game is actually pretty impressive if you ask me.
John

Kodak was very late to the digital transition. granted, it’s hard to see emerging markets that are directly in competition with the one you dominate, but that’s the whole point. They spent a fortune trying to get into the Polaroid dominated instant film market, which they got sued out of, but then dragged their heels converting their users to digital. Again, they bore the startup costs, but creating a market for cameras and film does not get you permanent domination of the photographic market. Their startup costs were long ago amortized and depreciated.

All that said, you are right. The people who lead the charge into a market first are often the ones who get the arrows in their back.

Kodak was very late to the digital transition. granted, it’s hard to see emerging markets that are directly in competition with the one you dominate, but that’s the whole point. They spent a fortune trying to get into the Polaroid dominated instant film market, which they got sued out of, but then dragged their heels converting their users to digital. Again, they bore the startup costs, but creating a market for cameras and film does not get you permanent domination of the photographic market. Their startup costs were long ago amortized and depreciated.

All that said, you are right. The people who lead the charge into a market first are often the ones who get the arrows in their back.

Another good example is Prodigy and AOL as ISPs — Without Prodigy (and to a MUCH lesser extent, Compuserv and local BBSes), the modem manufacturers, higher-fidelity telephone lines and increased number of local exchanges, and reduction in costs to call from one exchange to another would not have happened as fast, and AOL would’ve spent all the resources that Prodigy spent beating down those barriers. Another modern parallel is Myspace and Facebook … or heck, speaking of Paralells, Paralells Desktop and VMWare Fusion. Even Apple MacOS and Microsoft Windows could be an example.

Did AOL do better than Prodigy? In the end, yes. But Prodigy had higher start-up costs because no one had done it before on that scale. By the time AOL really got moving, Prodigy had already shown that it was possible and largely what was necessary. Nintendo had higher start-up costs because they had to develop the supplier networks and some of the basic technology, and then they had to prove it was possible to make money at it. Everyone else just followed in their footsteps and made incremental improvements before the Prodigy/Nintendo/Myspaces could recoup their startup expenditures.

I guess it goes back to being the ‘first to market’ — you don’t necessarily want to be first to market. You want to be second to market, you want to do it better, and you want to steal as much as you can from the first guy who got to market.

Another good example is Prodigy and AOL as ISPs — Without Prodigy (and to a MUCH lesser extent, Compuserv and local BBSes), the modem manufacturers, higher-fidelity telephone lines and increased number of local exchanges, and reduction in costs to call from one exchange to another would not have happened as fast, and AOL would’ve spent all the resources that Prodigy spent beating down those barriers. Another modern parallel is Myspace and Facebook … or heck, speaking of Paralells, Paralells Desktop and VMWare Fusion. Even Apple MacOS and Microsoft Windows could be an example.

Did AOL do better than Prodigy? In the end, yes. But Prodigy had higher start-up costs because no one had done it before on that scale. By the time AOL really got moving, Prodigy had already shown that it was possible and largely what was necessary. Nintendo had higher start-up costs because they had to develop the supplier networks and some of the basic technology, and then they had to prove it was possible to make money at it. Everyone else just followed in their footsteps and made incremental improvements before the Prodigy/Nintendo/Myspaces could recoup their startup expenditures.

I guess it goes back to being the ‘first to market’ — you don’t necessarily want to be first to market. You want to be second to market, you want to do it better, and you want to steal as much as you can from the first guy who got to market.