WSJ.com - Kodak Shifts Focus From Film, Betting Future on Digital Lines

WSJ.com - Kodak Shifts Focus From Film, Betting Future on Digital Lines "Finally yielding to technology changes that have made its signature product outdated, Eastman Kodak Co. is preparing a big strategic move away from traditional film and plans to bet its future on new digital markets.
In a risky move that the company characterizes as a historic shift, Kodak is expected to announce Thursday that it will boost investment in nonphotographic areas and make new forays into digital territory dominated by big, entrenched competitors. It intends to compete head-on with Hewlett-Packard Co., Canon Inc. and Seiko Epson Corp. by launching a line of ink-jet printers for consumers, an effort that could be several years away. Kodak, leveraging an existing joint venture, also plans to expand its product line in the high-end digital-printing market, in a challenge to leaders Xerox Corp. and H-P.
At the same time, the company says it will make no more significant long-term investments in traditional consumer film -- nothing, it says, as ambitious as its move to develop the alternative-format Advanced Photo System in 1996.
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Today, traditional film and photography account for 70% of Kodak's revenue and all of the company's earnings from operations. By 2006, the company says, its traditional business will shrink to 40% of revenue and half of all earnings. Currently losing money, the digital business, meanwhile, will grow to 60% of revenue from its current 30% over the same time frame, and will account for half of earnings from operations, the company predicts."