[Article] Kodak Leads in U.S. Digital-Camera Market

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Bill Tuthill wrote:
> Steven M. Scharf <scharf.steven@linkearth.net> wrote:
>
>>Actually, ROI and ASP should be more of interest.
>>Selling mass quanitites of low end cameras may not make Kodak any money.
>>They lost $142 million in Q12005.
>
>
> I'd like to know the truth of the matter. Why is Kodak so unprofitable?
> Certainly all the bogus investments (ASF dry-process film) didn't help.
>
> But it's hard to believe they aren't making money from digicam sales.
> The EasyShare models sell at prices from $150 to $300, which is much more
> than the average sales price of film P&S cameras, and I doubt digicams
> are any more expensive to produce. Having #1 market share means Kodak
> has sufficient volume to easily recoup production costs.
>
> Kodak must be making money on film and paper sales. These are cash cows.
> Here is a relevant paragraph from their most recent 10-Q filing:
>
> The [3 or 5%] decrease in net sales was due to declines in price/mix
> and declines in volumes, which decreased first quarter sales by
> approximately 4.1% and 3.6%, respectively. The decrease in price/mix
> was primarily driven by the film capture Strategic Product Group
> (SPG), consumer digital capture SPG and the Health Group digital
> capture SPG. The decrease in volumes was primarily driven by declines
> in the film capture SPG, the wholesale and retail photofinishing
> portions of the consumer output SPG, and the Health Group digital output
> and film capture and output SPGs. These decreases were partially offset
> by increases attributable to the acquisition of NexPress Solutions, which
> contributed $78 million or approximately 2.7% to first quarter sales,
> and favorable exchange, which increased first quarter sales by ~ 1.9%.
>
> I think price/mix is Kodakspeak for margins. So the problems are that
> they were forced (or chose) to sell film, digicams and health care stuff
> at a lower price. Also film and photofinishing (but not digicams) did
> less business, plus Health Care did poorly. Fortunately the dollar
> was weak and NexPress (who?) is generating cash.
>
> I'm surprised Health Care did poorly. "This segment supplies the
> healthcare industry with traditional and digital image capture and
> output products and services." X-rays etc. Must be competition
> because health care spending certainly has not decreased lately.
> I'll check to see if my dentist is buying Fuji X-ray film.

Probably because a LOT of medical imaging is mostly digital these days.


--
Ron Hunter rphunter@charter.net

 

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KennyJr <kennyjr@NOSPAM.floodcity.net> writes:
>In article <Xuvge.2127$i03.484@fe06.lga>, rphunter@charter.net says...
>> The American worker has priced himself out of the labor market.

>I totally disagree with this statement. What's wrong with earning a
>living wage & having decent benifits? I beleive the problem is at the
>other end of the labor market. Do CEOs really need 7+ figure salaries to
>live on?

No they don't, but that's likely a small portion of the final cost of
goods. Probably a larger factor is that the American worker is
unwilling to pay what goods cost when they are produced by other
American workers. People mostly buy stuff at the lowest price
available, even if it's worse quality, even if it's made in China.
Look at the popularity of "dollar stores" where (as far as I can tell)
everything they sell is truly junk quality.

I do it too. I'll buy a Chinese micrometer for $20 because it works,
and it's accurate, even if it doesn't look and feel as good as the
Starrett or Mitutoyo that costs 4-8 times as much, or even the Polish
one that costs 2 times as much.

This is likely to equalize somewhat over time, as Chinese workers'
standard of living rises, and the Chinese currency rises, while our own
standard of living drops.

Dave