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Commentary: Kodak is getting off the dime with digital

Eastman Kodak's purchase of a piece of digital-photography site PhotoAlley.com and its CD deal with Circuit City are encouraging signs that Kodak is getting serious about digital.

    By James Lundy, Gartner Analyst

    Eastman Kodak's purchase of a piece of digital-photography Web site PhotoAlley.com and Kodak's CD deal with Circuit City are encouraging signs that the world's largest photography company is getting serious about the digital-photography market.

    See news story:
    Kodak sharpens its digital focus
    Kodak seems to be recognizing--somewhat belatedly--that it must form partnerships with companies that can provide digital photography services that will enhance Kodak's camera lines and paper products, since as the digital photography revolution progresses, Kodak will inevitably sell less film. The alliances announced this week are likely only a first step.

    It is probably not accidental that Kodak's announcement of the PhotoAlley.com and Circuit City marketing initiatives coincides with its hiring of Ted Lewis to oversee digital-business development. Lewis helped create DaimlerChrysler's Silicon Valley venture capital fund and will now attempt to create the same kind of digital-business incubator for Kodak.

    Kodak has the right idea here; however, it must execute aggressively. Although digital-photography products have not yet reached the stage of widespread adoption, they're getting there fast. Kodak is in an excellent position to leverage its high brand recognition and consumer trust into a solid position of leadership in the digital photography market, provided it does not allow itself to fall too far behind its competitors.

    (For related commentary on digital-camera storage technologies, see TechRepublic.com--free registration required.)

    Entire contents, Copyright © 2000 Gartner Group, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.