Kodak have decided to pull out of the digital camera business and focus its efforts on licensing its brand name and offer it to other digital camera manufacturers, the company representative said on Wednesday.
Kodak will downsize its digital camera business- which includes digital picture frames, pocket video cameras and digital cameras- in the first half of 2012. Instead, the consumer business of the company will focus solely on photo printing, via desktop inkjet devices and retail as well as online services.
The photography company based in Rochester, N.Y is trying to find ways to monetize, because on January 25 it filed for bankruptcy protection Chapter 11.
Once Kodak have completed its digital camera downsize, the company is expecting to have operational savings of nearly $100 million. However, in order to cover the layoffs regarding its exit from the business, the company has to take a charge of $30 million.
This announcement comes just a couple of weeks after Kodak presented four new digital cameras at the Electronics Show in Las Vegas.
In 2004, Kodak stopped selling traditional digital cameras. Since then, the company has sold disposable cameras.
Following its Chapter 11 filing, Kodak stock, which trades on the pink sheets, rose to nearly 44 pennies in the morning trading.
Kodak have found it quite difficult to keep up with the digital camera technology and the stock price and sales of the company have reflected those issues.
From 2005 to 2010, sales decreased almost in half and profits ran low. In December 2010, Kodak were removed from the S & P 500.
In June 2011, Kodak announced that it was looking for ways to sell almost 1100 patens or roughly 20 percent of the patent portfolio of the company. In November the same year, from pre-existing $300 million credit line, Kodak tapped $150 million. This was a move that pushed the company even further into junk territory and downgraded the debt securities of the company. A couple of days later, bankruptcy rumors began swirling.
As Wednesday’s press release mentioned it, Kodak are now relying on its brand name in the digital camera market. In the meantime, Kodak will continue to provide technical service and support as well as honoring warranties of all digital cameras.