Kodak 2004 Annual Report Download - page 5

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2004 SUMMARY ANNUAL REPORT
Management’s Letter
The market value of Kodak stock increased 26% in 2004, more than
the average growth of the Dow Jones Industrial Index and the S&P 500.
BUSINESS REVIEW
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Digital & Film Imaging Systems (D&FIS) Our Con-
sumer business is dedicated to providing easy-to-use products that allow
people to take and share images with uncompromising results “Anytime,
Anywhere.” By continuing to grow sales of our capture and output prod-
ucts, we will also build an aftermarket for consumables and services that is
important to Kodak’s success.
We achieved strong digital product and systems growth in our con-
sumer business in 2004.
Kodak EasyShare digital cameras captured the No. 1 U.S. market
share position for the full year, according to the market research fi rm, IDC.
The Company also ended 2004 with No. 1 digital camera market share
in Australia, Argentina, Peru and Chile, and top three share positions in
Germany, the United Kingdom, Mexico and Brazil.
EasyShare cameras ranked highest in customer satisfaction in the
$200-$399 and $400-$599 categories—the mid-price ranges preferred
by “regular consumers”—in the J.D. Power and Associates 2004 Digital
Camera Satisfaction Study. Also, the new Kodak EasyShare-one zoom digi-
tal camera, which allows wireless transmission of images, earned “Best of
Show” awards at the 2005 International Consumer Electronics Show (CES).
Kodak EasyShare printer docks were the best-selling line of snapshot
photo printers in the U.S. in 2004, according to another research fi rm, NPD
Group. Kodak also holds the top snapshot printer share in the U.K. and
Australia.
For those who prefer to print at retail, Kodak’s picture maker kiosks
—with an installed base of more than 60,000 units worldwide—are mar-
ket leaders. Increasingly, these units include capability to receive images
wirelessly from phone cams.
The success of such products is already driving aftermarket growth.
Due to the popularity of Kodak’s printer dock and retail photo kiosks,
thermal media sales increased several-fold in 2004. We are now expanding
thermal media capacity at our Colorado plant and will invest $45 million in
new thermal capacity in Rochester.
Kodak’s market-leading Ofoto internet service, now rebranded as
Kodak EasyShare gallery, is experiencing strong monthly growth for online
picture processing and services. It now has more than 20 million members.
We also launched the Kodak mobile service for wireless phone-cam users
who want to store and share images.
The entertainment market, served through D&FIS, is one area where
fi lm continues to be the medium of choice. Our new Kodak Vision2 color
negative fi lms received an enthusiastic reception from cinematographers.
Recently, for the 77th consecutive year, the Academy Award for
“Best Picture” went to a movie captured on Kodak fi lm. Revenue for
entertainment fi lms, including origination and print fi lms, increased 12% in
2004.
Still, Kodak is preparing for the future by expanding our presence
in digital systems and services for motion picture theaters. We now have
contracts to supply digital pre-show entertainment systems for more than
1,300 theater screens. This means that every month, more than 2.5 million
moviegoers experience digital pre-show content distributed through Kodak
technology.
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Health Group Kodak’s Health Group has expanded beyond its
worldwide success in radiology to offer a growing range of digital systems,
technology and services that enable healthcare personnel to capture, share
and manage medical images and related information. Increasingly, the
group is also providing solutions for specifi c healthcare segments like diag-
nostic imaging centers, orthopedic practices, women’s healthcare providers
and dental practices.
Long the leader in dental imaging fi lm, Kodak now is also the No. 1
provider of dental digital radiography systems and dental practice manage-
ment software. In the women’s health arena, the new Kodak DryView
8900 laser imaging system with software for mammography exceeded
sales plans. The new Kodak mammography CAD system, the Company’s
fi rst computer-aided detection product, entered the marketplace in 2004.
In March 2005, we acquired OREX Ltd., a leading supplier of compact
computed radiography systems. This will further strengthen the Health
Group’s ability to serve women’s healthcare providers and other target
market segments.
Traditional x-ray products continue to be a major contributor to
Kodak’s health business. X-ray fi lms for mammography and oncology
gained share. Although traditional radiography sales declined moderately,
Kodak is the worldwide share leader in this market. In 2004, the Company
announced the fi rst high-resolution fi lm in 20 years to offer a signifi cant
radiation dose reduction. Kodak hyper speed G medical fi lm enables a 50%
lower dose while maintaining high image quality.
Kodak sales of digital health products and services grew 20% in
2004. The group registered good gains in computed radiography (CR) and
digital radiography (DR), while making major strides in digital output, ser-
vices and healthcare information systems. Under one signifi cant contract,
Kodak will install a digital information management system as part of an
information technology upgrade of the United Kingdom’s National Health
System.
In the Asia-Pacifi c market, the Health Group will showcase its offer-
ings—and provide remote service, training and product staging for its cus-
tomers—at a new Technology and Innovation Center in Shanghai. A similar
Kodak center is located in Genoa, Italy, to serve European customers.
“We achieved strong digital product and systems growth in our consumer business in 2004.”
“ Kodak EasyShare digital cameras captured the No. 1 U.S. market share position for the full year…”
“ Kodak’s Health Group…offers a growing range of digital systems, technology and services that
enable healthcare personnel to capture, share and manage medical images and related information.”