As you may have read in the press, today Kodak announced a growth strategy, where the company plans a three-year program to enhance its competitive position. Here is a link to the information on the Kodak website:
http://www.kodak.com/US/en/corp/pressRelea...040122-02.shtml
Here is a letter from Eric Rodli, President of Kodak Entertainment Imaging to our customers, giving more detail about how this strategy affects Entertainment Imaging:
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January 22, 2004
Dear Kodak motion picture customer:
This week you may have heard some updates on Kodak's new business strategy, as well as plans to lower our cost structure.
The structural changes announced are not a reaction to temporary earnings or business pressures. In the consumer world, the digital reality is now, and Kodak has no choice but to adapt to the digital model, which is characterized by faster growth, tighter profit margins, aggressive pricing and swift product turnover.
Please do not interpret this as Kodak 'abandoning' film.
Refocusing our R&D investments applies primarily to our consumer and medical imaging businesses, where the demand for digital imaging products and services is growing rapidly. Reducing costs in these areas also allows for Entertainment Imaging to continue its efforts to deliver the best film products - and best value possible to our motion picture customers.
Entertainment is still a film business, and film will remain an important part of the imaging chain into the foreseeable future. The success of our VISION2 product proves motion picture film's continued viability in the marketplace, and justifies future investment in silver halide. Nothing approaches film for its quality, resolution, dynamic range, flexibility and archivability.
At the same time, EI is expanding its digital participation, and we are making selective and strategically important investments to do that. One such investment is the acquisition of postproduction company Laser Pacific. This broadens our participation in the TV post arena, and brings exciting new digital/hybrid competencies to Kodak.
We believe that, in our industry, digital solutions make the most sense in the post production arena?so that's where you'll see the majority of our digital participation in the short term. And this includes our silver halide investments, which are incorporating a full systems approach for more flexibility in post.
We're working hard to supply you with the technology for what we foresee as a film/digital hybrid world. As such, within Entertainment Imaging, Kodak?s commitment to and investment in film continues. In fact, we continue to dedicate over 70% of our motion picture R&D budget to film technology. Additional announcements later in the year will attest to that fact.
Know that we remain passionate about film building. We are committed to all our customers in the creative community and to developing a full range of tools and services to help bring your vision to the screen, more faithfully, efficiently, and at the highest levels of quality.
Sincerely,
Eric Rodli
Eric Rodli,
President Entertainment Imaging
Senior Vice President Eastman Kodak
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