Kodak 2005 Annual Report Download - page 4

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“ Kodak retained its #1 U.S.
market position in digital still
cameras in 2005, increasing
our lead over the next closest
competitor. Worldwide, we
ascended to the #2 position.”
Business Review
We can proudly point to examples of growth and innovation in each of our business areas.
n Digital and Film Imaging Systems
Digital Products and Services
Some aspects of the consumer imaging business don’t change with the technology. People still want simple solutions that will let them take, share
and control pictures of their lives. Kodak is committed to providing new capabilities, while staying true to the “you press the button, we do the
rest” simplicity on which our company was built.
According to the market research fi rm IDC, Kodak retained its #1 U.S. market position in digital still cameras in 2005, increasing our lead over the
next closest competitor. Worldwide, we ascended to the #2 position. We were also:
• #1 worldwide in snapshot printers, competing against the specialized printer companies.
• #1 in retail photo kiosks, with nearly 75,000 installed worldwide — far ahead of our nearest competitor.
• #1 in online services with the Kodak EasyShare Gallery, which today has more than 30 million registered members.
With this presence, it is not surprising that our products continue to receive numerous accolades. For the second consecutive year, we captured
the highest rankings in two of four price segments in the J.D. Power and Associates Digital Camera Satisfaction Study. The two segments,
$200 – $399 and $199 or less, comprise more than 85% of the U.S. digital camera market, according to NPD Techworld.
After taking top honors at the 2005 Consumer Electronics Show (CES), the world’s largest event of its kind, the Kodak EasyShare-One digital
camera was lauded in hundreds of publications around the world for its unique design and its status as the world’s fi rst consumer camera offering
wireless transmission of pictures. It was also featured on the cover of Business Week as one of that magazine’s Best Products of 2005.
Industry buzz was also strong for the new Kodak photo kiosk G4. It features wireless input of images from digital cameras and camera phones,
provides four-second printing and is 30% lighter and smaller than previous models — giving retailers an attractive alternative to minilabs for
digital printing.
In fact, to meet growing demand for thermal prints from our kiosks and printer docks, we added manufacturing capacity for thermal paper and
media at our plant in Windsor, Colorado. Additional capacity will be operational this year in Rochester, New York.
Consumers will see more innovative products from us in 2006. Already, our new Kodak EasyShare V570 zoom digital camera is being heralded by
technology opinion leaders, and was named one of the 25 Most Innovative Products of 2006 by PC World editors. The world’s fi rst dual lens digital
still camera, it features both an ultra-wide angle lens and optical zoom lens in a body less than one-inch thick.
We are also collaborating on the next generation of mobile capture devices through a 10-year global product, cross-licensing and marketing
alliance with Motorola, one of the world’s leading wireless companies. This agreement, negotiated in 2005, provides us an opportunity to sell
image sensors to Motorola, and to link Motorola phone users with the Kodak Gallery and other Kodak services for storing and printing pictures.
Traditional Products and Services
As we manage the growth from our digital products and services, we are also effectively managing the overall decline in sales from our traditional
products and services. There, inventory reductions and cost controls have generated substantial cash to fund our transformation.
In the motion picture industry, a majority of fi lmmakers continue to choose fi lm over current digital alternatives. They feel it still offers superior
imaging and archival characteristics, as evidenced by products like the Kodak Vision2 fi lm platform, which has dramatically improved the quality
of motion picture fi lm. Development into hybrid technologies and digital services, to make fi lm perform even better in conjunction with increasingly
digital postproduction work, is also taking place. As such, fi lm volumes and revenues have remained very consistent in the entertainment sector.
As testimony to Kodak’s presence in this market, every movie nominated for the Oscar for “Best Picture” of 2005 was recorded on Kodak fi lm.
In fact, since the Academy Awards were fi rst given in 1928, every “Best Picture” has been shot on Kodak fi lm.