Kodak to End Traditional Film Camera Sales in U.S.

Eastman Kodak Co. on Tuesday said it would stop selling traditional film cameras in the U.S., Canada and Western Europe, another move by the photography company to cut lines with declining appeal in favor of fast-growing digital products.

With sales of digital cameras poised to overtake film cameras this year for the first time, Kodak is redefining itself in an effort to keep pace.

But the No. 1 maker of photographic film will continue to sell one-time use cameras in the West and expand its sales of these and other film-based cameras -- and film -- in emerging markets where demand is rising.

The move comes amid Kodak’s controversial plan to focus on high-growth digital products, such as medical imaging systems and production printing, and reduce dependence on its declining film business. Late in 2003, Kodak said it would stop making slide projectors, but still manufacture color slide film.

“Every one of these steps indicates more and more the strength of Kodak’s conviction of moving toward digital,” said analyst Shannon Cross of Cross Research. “However, the jury is out on whether [the digital strategy] will work.”

Blaming declining demand, the Rochester, N.Y.-based firm said by the end of 2004 it would quit making reloadable cameras that use 35-millimeter film, including those in the Advanced Photo System, or APS, format.

In 1996, when it was unveiled, Advantix was hailed by Kodak as the “most important photographic announcement since Instamatic cartridge-loading cameras were introduced in 1963.”

Kodak still will make film for existing Advantix and other cameras, and intends to introduce high-performance 35 millimeter and Advanced Photo System films next month.

Camera makers typically make little profit -- or lose money -- on hardware, but enjoy strong margins from sales of supplies such as film and paper, which must be replaced frequently.

Kodak said that it planned to continue making reloadable cameras that use 35-millimeter film in emerging markets, such as China, India, Eastern Europe and Latin America and that it would introduce six cameras in those markets this year.

“[We] estimate that there are 60 million Chinese consumers who have the purchasing power to participate in photography, but have not bought their first camera,” Kodak spokesman Charles Smith said.

Under Kodak’s new strategy, unveiled in September, it will shift its investments into digital markets with greater growth potential than the waning film market. But film still provides ample revenue for Kodak -- more than 120 million rolls of film are sold each year industrywide.

According to estimates by InfoTrends Research Group, global film camera shipments in 2004 will shrink to 36 million units from about 48 million in 2003, while digital camera shipments will rise to 53 million from 41 million units.

Other companies that helped develop APS -- Canon Inc., Fuji Photo Film Co., Minolta Co. and Nikon Corp. -- will continue to make APS cameras.

“The consumer who has APS likes it a lot, but the growth potential is probably tapped out from Kodak’s standpoint,” said Gary Pageau, a spokesman for the industry group Photo Marketing Assn.

Kodak shares rose 3 cents to $26.36 in New York Stock Exchange trading Tuesday.