> Kodak invented the digital camera but their revenue came from making photographic film. They were unable to take advantage of their invention because it would cannibalise their revenue.
a bit more nuanced take on the failure would also account for executives backgrounds at the critical period:
- in 1981 Vince Barabba — Kodak's Head of Market Intelligence — conducted an extensive internal study that explicitly concluded digital photography could replace film and that Kodak had approximately 10 years to prepare for the transition.
- Kodak's leadership in 1980–1993 saw the company through the lens of its founding identity — silver-halide chemitry, precision coating and manufacturing, and the extraordinarily high margins of the film-plus-processing business. This identity-driven decade was spent on failed diversification and defending film instead of building an electronics cost structure and a defensible high-margin position. They steered capital and attention toward businesses that fit that self-image (specialty chemicals, pharmaceuticals, hybrid film products) rather than toward digital cameras, which meant fighting Sony and Canon on low-margin electronics turf where Kodak felt no competence and feared cannibalizing film.
- It was an inside executive culture, crystallized in the 1990 choice of film-lifer Kay Whitmore over the digital-minded Phil Samper. When Chandler retired, the finalists were Whitmore and vice-chairman Phil Samper, who had a deep appreciation for digital technology. The board chose Whitmore, and was explicit about why: as the New York Times reported, Whitmore said he would keep Kodak closer to its core businesses in film and photographic chemicals. Samper resigned and went on to become president of Sun Microsystems and then CEO of Cray Research — i.e., to lead exactly the kind of digital/computing companies Kodak was avoiding becoming.
- so when Kodak did get serious to compete in digital (in 1993 board made Fisher the CEO, he came from running Motorola and held an engineering degree plus a doctorate in applied mathematics) it did so as one commodity hardware maker among many and that was too late since film began to drop as digital started to pick up, exactly as Vince Barabba predicted in 1981