Kodak 2007 Annual Report Download - page 6

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Reportable Segments
As of and for the year ended December 31, 2007, the Company reported financial information for three reportable segments: Consumer Digital Imaging
Group (CDG), Film Products Group (FPG), and Graphic Communications Group (GCG). The balance of the Company’s operations, which individually and
in the aggregate do not meet the criteria of a reportable segment, are reported in All Other.
The following business discussion is based on the three reportable segments and All Other as they were structured as of and for the year ended Decem-
ber 31, 2007. The Company’s sales, earnings and assets by reportable segment for these three reportable segments and All Other for each of the past
three years are shown in Note 24, “Segment Information.”
Consumer Digital Imaging Group (CDG) Segment
Sales from continuing operations of the CDG segment for 2007, 2006 and 2005 were (in millions) $4,631, $4,711, and $5,646, respectively.
The Company is a global leader in providing digital photography products and services for consumer markets. Kodak holds top three market shares in
many major categories in which it participates, such as digital still cameras, retail printing, and digital picture frames.
CDG’s mission is to enhance people’s lives and social interactions through the capabilities of digital imaging technology, combined with Kodak’s unique
consumer knowledge, brand and intellectual property. This focus has led to a full range of product and service offerings to the consumer. CDG’s strategy is
to extend picture taking, picture search/organizing, creativity, sharing and printing to bring innovative new experiences to consumers – in ways that extend
Kodak’s legendary heritage in ease of use.
Digital Products: Consumer digital products include digital cameras, digital picture frames, home imaging accessory products, and snapshot printers and
printer media. These product lines fuel Kodak’s participation in the high revenue growth imaging device and accessory markets. Products are sold directly
to retailers or distributors, and are also available to customers through the Internet at the Kodak store (www.kodak.com). Kodak’s full line of camera
products and accessories enable the consumer to personalize their digital camera and their photographic experience. In January 2007 Kodak introduced a
new line of Digital Picture Frames that play customizable slideshows of pictures and videos that can be set to music.
Retail Printing: In January 2007, the Retail Printing Group was redefined to manage Kodak’s complete set of digital printing hardware, media and infra-
structure offerings to retailers. This consolidation enabled a complete set of resources to be applied to bringing innovative service products to retailers,
and as such added scale and stability to CDG’s ongoing revenue, cash flows and earnings. Kodak’s product and service offerings to retailers include retail
kiosks, color paper, processing chemistry, retail store merchandising and identity programs, after sale service and support, web infrastructure support,
and wholesale printing services. Kodak Picture Kiosks and associated media, with approximately 90,000 installations worldwide, are sold directly to major
retailers and provide consumers with a flexible array of output products from their digital images. These products include high-quality custom printed
products, and the ability to automatically create collages and interactive, picture-movie DVDs set to music.
Online Imaging Services: Kodak Gallery, which has more than 50 million members, is a leading online merchandise and sharing service in the category.
The Kodakgallery.com site provides consumers with a secure and easy way to view, store and share their photos with friends and family, and to receive
Kodak prints and other creative products from their pictures, such as photo books, frames, calendars, and a host of other personalized merchandise. In
2006, Kodak entered a partnership to develop and sell a line of branded Martha Stewart photo products on Kodak Gallery. Products are distributed directly
to consumers’ homes, or through relationships with major retailers. Additionally, the site is a chosen partner for leading companies such as Adobe, Apple,
Microsoft, and Amazon.
Kodak also distributes Kodak EasyShare desktop software at no charge to consumers, which provides easy organization and editing tools, and unifies the
experience between digital cameras, home printers, and the Kodak Gallery services.
Imaging Sensors: Kodak’s line of CCD and CMOS sensors provides an attractive market opportunity, including mobile, automotive, industrial and profes-
sional imaging sectors. Kodak has leading sensor architecture intellectual property positions, and operates with an “asset light” manufacturing strategy
that includes partnerships with key industry players for large-scale semiconductor manufacturing.
All-in-One Inkjet Printers: In February 2007, Kodak introduced the Kodak All-in-One Inkjet Printing System as a major initiative to drive future rev-
enue growth and earnings. Four key components enable an expected breakthrough market entry: 1) a proprietary high-speed inkjet printing system; 2)
nanoparticle pigment-based inks; 3) instant-dry, porous papers; and 4) Kodak’s unique Image Science technologies. Additionally, the system is designed
with a permanent print head. This unique offering is targeting the high-volume document and photo printer market with a breakthrough value proposition
delivering lower cost per printed page as compared with competitive products. The inkjet operating model leverages Kodak technology and the efficiency
of the current industry infrastructure to achieve an “asset light” approach to deliver this unmatched value proposition to the marketplace.