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Dennis Hissink : August 23th 2004 - 08:19 CET

Kodak growing in Digital Camera market

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KodakAfter a slow start, Eastman Kodak Co. is steadily gaining ground on front-runner Sony Corp. in the burgeoning U.S. digital camera market and opening up a lead on Canon, Olympus and other Japanese rivals. As digital cameras grew swiftly in popularity in recent years, Japanese manufacturers looked at first to have eaten Kodak's lunch. But the world's biggest film photography company is making good on its mission to become the No. 1 seller of filmless cameras on its home turf in 2004. In the first six months, Kodak shipped 1.47 million point-and-shoot digital cameras in the United States, 80 percent more than in the first half of 2003 - and its market share jumped from 15.3 percent to 18.3 percent, the market research firm IDC said Friday.
While Sony shipped 1.73 million cameras, up 48 percent from the first half of 2003, its slice of the U.S. market slipped from 21.9 percent to 21.5 percent, according to IDC, which is based in Framingham, Mass.
Canon moved into sole third place with a 14.7 percent share as Olympus fell back to 11.8 percent. Next were Fuji with 8.7 percent, Hewlett-Packard Co. with 7 percent and Nikon with 5.7 percent, IDC said.

"As relatively late as Kodak was to come out with its digital cameras, they've done a good job of regaining share," said analyst Shannon Cross of Cross Research in Short Hills, N.J. "I think Kodak will continue to be very successful in the mass market. It will be harder for them to compete when you move upscale."

Kodak's EasyShare digital camera line, priced between $129 and $499, was launched in 2001. Its latest $499 camera, a 5-megapixel model with a 10X optical zoom lens, is arriving in stores this month.

The easy-use cameras, designed for amateurs, come with a docking station that enables images to be transferred to a computer at the touch of a button. They can also be hooked to printers that deliver prints in 90 seconds.

Kodak, which invented the world's first digital camera prototype in 1976, appeared to have been caught off-guard by the speed with which shutterbugs took to digital photography, analysts say. But Kodak insists it didn't want to leap in until a mass market was clearly developing.

After just a few years, digital cameras are now outselling traditional film cameras in the United States. "We're in the steep part of the S-curve in terms of technology," Cross said.

The Photo Marketing Association, based in Jackson, Mich., estimates that 15.7 million digital cameras and 10.6 million film cameras will be sold this year.
"We remain very committed to this space and we're driving our business on a worldwide basis to achieve a top-tier position," Greg Westbrook, general manager of Kodak's digital-capture business.

Last year, Sony ranked first in sales with a 21.7 percent market share, down from 24 percent in 2002. Kodak moved into second place with an 17.9 percent share, up from 13 percent in 2002.

As its makes the tough transition from analog to digital photography, Kodak is slashing its payroll. By 2007, its work force is expected to drop by 12,000 to 15,000 to World War II-era levels of around 50,000.

On New York Stock Exchange, Kodak shares rose 29 cents, or 1.1 percent, to close Friday at $26.80.

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