The Eastman Kodak Company’s stock price fell to a new low on Wednesday, as reports came in that the ailing company is about to seek bankruptcy court protection. This leaves many people questioning how Kodak could have fallen so far and so fast. Eastman Kodak, a technology titan of the industrial age, has been struggling for years. Kodak's cash crop of film and film processing was killed by digital photography and at home printing. The Wall Street Journal, quoting unidentified insiders, said Kodak is preparing for a Chapter 11 bankruptcy filing "in the coming weeks".
As the market began to turn away from film cameras and more consumers started purchasing digital cameras, Eastman Kodak was in the position where they needed to diversify their technology offerings. Kodak began selling printers to consumers in 2007. Kodak’s strategy was to run counter to the industry's prevailing approach of offering a more expensive printer and cheaper ink. The majority of inkjet or laser printer manufacturers sell the printers at a loss in hopes of recouping their money on the sale of high priced ink cartridges and toner. (You can beat them at their game by buying your replacement ink cartridges from Clickinks.com.)
By 2010, the company held 3% of the all-in-one inkjet printer market world-wide, up from 1% in 2008. Kodak's strategy was to subsidize the business on the cost of the printers until its installation base was large enough to generate a proportional amount of ink sales. Still, because it’s proprietary ink refills were cheaper than its other OEM competition (HP, Canon, and Epson); Kodak was trying to sell its printers at a higher price than competitors. But as of last quarter, Kodak's innovative printers still weren't turning a profit.
Fear not, if you are a fan of Kodak. There is still a chance that the company will rebound, can avoid bankruptcy and continue making great printers and other products. But when it comes to your ink needs, Clickinks always offers all of the ink cartridges that you may require. Just go to Clickinks.com and save yourself some money and the environment in one simple internet transaction.
Kodak entered the printer market in '07 with a revolutionary business plan: charge slightly more for inkjet printers than other manufacturers, but charge half the price for ink cartridges.
They released the EasyShare 5300
: an inkjet with cartridges 50% cheaper than HP’s equivalent model, the PhotoSmart C5180
. They launched a full ad campaign, warning consumers that ink cartridges sold by other manufacturers cost more than crude oil.
Moreover, Kodak employed a new pigment-based dying process in their printers, which certified their images for 120 years. This contrasted favorably with the single year guaranteed by Hewlett Packard. Finally, Kodak promised they’d save consumers $110 annually.
In 2007 Kodak sold 520,000 printers. Impressive? Not really, when you consider that 61 million inkjet multifunction printers were sold that year.
Yet the Kodak
entry caused red alert at Hewlett Packard headquarters - both because Kodak aimed a stake at the heart of HP’s business model, and because Kodak targeted the most profitable consumers.
After all, Kodak’s promises of incredible savings wouldn’t mean anything to consumers for whom printers are dusty plastic boxes. It’s the printing maniacs – that 20% of inkjet consumers who purchase 80% of cartridges – with whom Kodak’s new strategy might resonate.
Since then, the two brands have been firing back and forth at each other. Kodak designed the (possibly Star Trek influenced) printandprosper.com to accompany their EasyShare
This website details the savings available with Kodak, and explains why other printer brands are soulless profit mongers. Hewlett Packard receives the worst beating from this campaign - arguably because the 63 cartridges types available from HP contrast with the 3 from Kodak.
In reply, Hewlett Packard
launched The Truth About Printing – a site targeted like a cruise missile at Kodak.
It illustrates an infinite queue of frowning Kodak consumers desperate to return their EasyShares, and promises $50 toward an HP printer. That’s the printing equivalent of removing your gloves.
More recently, this tussle has moved off the net and into the courts. Last year HP filed a complaint with the lengthily titled National Advertising Division of the Council of Better Business Bureaus (his friends call him NAD) that Kodak’s claim to save consumers $110 annually was inaccurate.
Kodak failed even to send a representative to the complaints proceeding. Instead, they released a short press statement saying their advertising claims had already been substantiated.
NAD responded by bundling the case off to the Federal Trade Commission.
Last December, the FTC decided that Kodak could claim their $110 savings – but on a minimum of four pages printed daily.
This tweaked text recognizes that consumers must guzzle an ink minimum before Kodak’s claims become viable. Kodak has asserted this alteration to their advertising vindicates them.
On the other hand, Hewlett Packard continues firing back. They most recently quoted a Lyra Research report that 50% of consumers never reach Kodak’s savings threshold.
Who then does provide the cheapest printing
? And do Kodak’s (seemingly) lower priced cartridges compromise quality? Comparisons of Kodak and Hewlett Packard’s printers are available through Google, though they report different things.
Broadly speaking – Kodak’s EasyShares give equal quality to HP’s PhotoSmart
series, so long as Kodak photo paper is employed. This however cuts the potential savings of Kodak’s ink cartridges. By comparison, the PhotoSmarts offer a more vibrant printout – but degrade quickly.
Therefore neither brand is the undisputed champion of printing – putting to one side the minefield of ink cartridge pricing. The division between Kodak and Hewlett Packard will continue - while the consumer watches on, uncertain.