The death of Polaroid
Last week privately-held Polaroid announced that it has stopped making film for its instant cameras and it expects that supplies will run out by next year. The company's demise is no surprise (it stopped making cameras last year), since its technology has been made totally irrelevant by digital technology. It is yet another example of once-prosperous firm felled by disruptive technology, and it illustrates a fate that Eastman Kodak is still fighting to avoid.
The US company, founded in 1937 and its technology reached the market in the late 1940s. In its day it was a disruptive technology, taking market share from Kodak by offering (semi-) instant gratification. When Kodak made a version of the same camera, Polaroid beat them in a patent battle in 1986. Polaroid had a monopoly in its small market segment, adored by Andy Warhol and treasured by a many a suburban family. I can remember my father eagerly applying the "gunk" to the just -taken photo as it magically developed.
In the nineties, with the advent of digital cameras, Polaroid's days were number. They knew it, and they tried several times, unsuccessfully, to get into digital photography and photo printers, but it was all too late. It's almost impossible for a company to abandon its main focus, essentially abandoning all it has stood for. The company went bankrupt in 2001, and a new Polaroid Company was made from the remnants, keeping in a holding pattern.
The situation resembles that of analog cameras, which is in a downward spiral, losing over 30% of sales per year. Kodak has been desperately trying to find replacement technologies, and it has had some success. Its losses last year were lower than expected. And it looks to be in the black in 2008. That's after cutting 28,000 jobs and restructuring itself from a large company to a mid-sized one. While digital revenue is increasing by 15% year-over-year, the film business is decline by 15% a year. Will Kodak be skillful enough to survive massive disruption?
6:15:21 PM 
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