Eastman Kodak To Focus On New Digital Strategy

By Agence France-Presse Photo giant Eastman Kodak Co. unveiled a new strategy Sept. 25 aimed much more heavily at digital imaging, saying the use of traditional film and cameras is on the wane. The plan unveiled to investors calls for "a broader strategy for growth that will harness the power of digital technology to expand into a range of commercial businesses," Kodak said in a statement. Kodak said the shift would result in a more diversified business portfolio with the potential to generate $16 billion in revenue by 2006 and $20 billion by 2010. The Rochester, N.Y.-based company, which helped make photography into a mass consumer phenomenon, has been a latecomer to the digital world. But Kodak said it had recruited a new management team "whose digital experience will allow the company to thrive in a time of structural change in the imaging industry." "We are acting with the knowledge that demand for traditional products is declining, especially in developed markets," Chairman and CEO Daniel Carp said. "Given this reality, we are moving fast -- as digital markets demand -- to transform our business portfolio, with an emphasis on digital commercial markets. The digital world is full of opportunity for Kodak, and we intend to lead it, as we have led innovation in the imaging industry for more than a century." The initiatives include pushing growth of Kodak's digital camera business and increasing the printing of pictures by home computer users or at stores. The company will also move to gain more market share in the medical segment of digital imaging and commercial services, such as on-demand digital color printing. Kodak also said it was cutting its dividend to 25 cents a share from the current level of 90 cents. "Becoming a growth company demands that we invest money to harness the opportunities afforded by digital markets," said Robert Brust, Kodak's chief financial officer. Standard and Poor's analyst Steve Wilkinson downgraded Kodak's credit rating, saying the company is embarking on a much more risky business strategy. Copyright Agence France-Presse, 2003