This Month's Spectrum Summary:

(The following is an excerpt from the February 2007 issue of Spectrum, a proprietary monthly briefing published exclusively for the clients of I.T. Strategies, Inc. © 2007)

2007 Impressive technology achievement;
Zingy, creative launch performance;
Bold, industry-disruptive pricing strategy

This is Kodak, introducing Easyshare All-in-One
inkjet printers earlier this month

Will it really "revolutionize" the consumer market?
Can it save this familiar old iconic institution?
Or is it a last gasp, too little, too late?

On February 6, 2007 Kodak released its new line of EASYSHARE inkjet printers, billed as a revolutionary product line for the home and raising lots of questions. So today we meet with Marco Boer and Patti Williams to dig beneath the headlines for some industry-significant perspectives. The new line consists of three models said to provide the ultimate print quality and, at the same time, saving users up to 50% on everything they print. Kodak lists the following technology choices coming out of their 3-year R&D program: pigmented inks; a new rapid-dry, microporous photo paper; print heads as a separate component, not integrated with the ink cartridges; and developing a way to combine the five color inks, two droplet sizes and photo paper to produce image quality that the company claims matches that of printers with 8-10 color inks. It appears to have been an in-house development by Kodak, building on experience with the HP-Kodak Phogenix program.

Aimed primarily at the home market, three models have been announced with pricing from $149.99 to $299.99. The MFPs have two paper feeds, one for photo papers and one for document papers. Mono speed is 32 ppm, color 22 ppm. Best quality 6x9-inch photo prints are done in 28 seconds. Kodak staged a major media blitz for the introduction and has built a lively web site promoting the new products.

Recognizing the problem of entrenched competition, with this program they have turned the business model upside-down by charging half as much as others charge for ink, offset by higher cost hardware than similar competitive models. The challenge for Kodak is to build up the installed base quickly, but this may take some time. It is felt that even if the Easyshare program brings in $500 million the first year, that alone won't turn the financial tide for the photo giant. In addition to Kodak's R&D investment, building the program will also entail significant distribution costs. It is believed that the printers will perform as advertised, but that Kodak needs to rapidly multiply applications for the technology. Wide format, larger format units for professional photographers, and mini-lab systems are possibilities.

Whether this gamble saves Kodak or not, it looks as though it will disrupt the current inkjet business model. Kodak's surveys, as well as surveys by
I.T. Strategies, have shown that ink cost is the main complaint of inkjet printer users. So other vendors may be motivated to compete by lowering their ink pricing and begin to again make money on the hardware "just like the good old days." In this sense, the new Kodak business model may not be a threat to the competition but rather an opportunity in disguise.