This document summarizes the rise of digital cameras and the decline of film cameras and the companies that produced them. In the 1990s and early 2000s, digital cameras rapidly improved in quality and dropped in price, while the number of digital cameras sold increased dramatically. This disrupted the film industry and destroyed longtime camera brands that relied on film sales for profits. Companies like Kodak, Polaroid, and Agfa that were built around film saw their market shares collapse. Meanwhile, electronics companies like Canon and Nikon that adapted to digital imaging came to dominate the industry. The transition required new electronic skills that many traditional camera makers lacked.

2. What’s this?

3. A warzone?

4. Well, kind of. It is what
remains from Kodak’s
building 65 in Rochester (NY).

5. It was demolished…

6. Many Kodak buildings have
been blown into pieces…

10. The explosion
30
25
20
15
10
5
0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Number of film and digital cameras sold in the
United States (guess which one is digital!)

12. Not anymore.

13. Many large and
profitable companies
in the camera industry
have died or suffered.

14. How and why
did this
happen?

15. Let’s go back
in history and
take a look…

16. The camera industry
remained stable
during most of the
20th century.

17. An infrastructure emerged
with global standards…

18. Film could be bought
everywhere…

20. … and be used with any of the
established camera brands…

21. Most companies had a stable
position in the global camera family

22. The professionals and photo lovers
often used Leica…

23. …Hasselblad..

26. Contax…

27. Mamiya…

28. Amateurs
mainly
used Kodak…

29. Fuji…

30. AGFA…

31. Canon…

32. Nikon…

33. Olympus…

34. Polaroid had their own niche in
instant photography.

35. The camera industry used to be a
kind of happy and stable family

36. And No one was happier than
the film manufacturers…

37. Photos required film…

38. So for each ’CLICK!’…

39. Agfa, Ilford, Kodak, Konica…

40. … Fuji…

41. … and Polaroid…

42. … made a good profit.

43. Just like Gilette made great money by selling
razor blades, these firms made great money
by selling film. The main source of profit is
not the razor or the camera, it was the
continuous consumption of blades and film.

44. So, the more photos you took,
the more money they made.

45. No wonder
film could be
bought
everywhere

47. A fantastic
business
model.

48. With fantastic
profits.

49. So, the competence base in the
camera industry was built upon
precise mechanics…

50. … And chemistry.

52. In 1981, the industry was shaken
when SONY launched their Mavica, a
camera that used floppy discs
instead of film.

53. Many companies feared that this
technology would eventually
substitute analogue photography.

54. In Japan it was referred to
as ’the Mavica shock’. They
feared that something like
this would happen.

55. Therefore, many
companies invested in and
launched their own
’Mavicas’ during the 1980s.

56. Canon formed a task force
to develop a colour Mavica
in 1981. It was launched in
1986. Fujifilm came up with
something similar in 1988.

57. But none of them lead
to any great success.

58. The Mavica was simply not the
way forward to digital imaging.

59. Though some threats
could be identified, the
camera industry
remained stable
through the 1980s.

60. Some of the
first digital
imaging
technology
came from
Leaf
Systems.

62. In the early 1990s they
produced digital backs, which
could be attached to Hasselblad
cameras instead of film.

63. It looked like this.

64. Yes, big and bulky.

65. But the business utility
was great. Many film
photos were digitized
sooner or later anyway.
With a digital back, one
step in the production of
photos could be removed.

66. The first digital backs were
expensive and had a moderate
performance. The first one by Leaf
had 4 Megapixels and Kodak
launched one with 6 Mpixels.

67. The performance was good enough
for some applications.

68. Press and Studio photographers
loved it and NASA was very
interested in the Kodak sensor.

69. The following
quotes illustrate the
dawn of digital
imaging.

70. ”The quality of high-end
digital studio cameras is
good enough to replace
film for most catalog and
magazine needs.”
MacWEEK 94-05-13

71. 6 million pixel resolution is
good enough for most
applications. The
perception of colour is
more important than the
perception of sharpness.
Kodak, 1996

72. Notice how both
sources use the term
’good enough’.

73. Digital
imaging had
other
attributes
which made
it attractive.

74. An infinite
amount of
photos could
be taken and
then be
replicated,
manipulated
and sent, at a
very low cost.

75. So the
business utility
of a digital
back which
cost maybe
30 000 dollars
was still big.

76. And the
image
quality was
Good
Enough.

77. A couple of attempts at
smaller, simpler digital
cameras were also
made in those years.

79. One of the first digital
cameras was a
Kodak/Nikon product,
launched in 1991.

80. Kodak had developed a
digital back, which was
built in to a Nikon camera.

81. Kodak A sensor with 1,3
Megapixel, an internal
harddrive of 200 megabyte
at a cost of 13 000 USD
(about 21 000 USD today!)

82. It was marketed to photo
journalists, hoping they’d
be willing to pay for being
able to view images
instantly , take a lot of
photos and removing the
long process of turning
film into a digital format.

84. In 1994, Apple launched
the QuickTake camera.

85. It looked like a pair of
binoculars, could store
32 photos and was the
first camera that could be
connected to a PC.

87. The price? 800 dollars.

88. Eventually, the
dominant design
emerged.

89. In 1995 Casio launched the QV10.

90. It had an image quality
of 0,25 Megapixels and
required 4 AA batteries.

91. Not the greatest gadget
mankind has invented.

92. But the concept of
having a LCD screen and
this design turned out to
be very attractive.

93. Now the big Japanese
dragons like Canon,
Nikon and Olympus
invested a lot in
developing this concept.

94. The Japanese firms worked
jointly in an industry
association to solve critical
technical issues.

95. Though firms like Kodak
knew this would
cannibalize on their film
business they still went in.

96. They thought that the
shift was inevitable.

97. Around 2000, the
digital cameras were
cheap enough and
good enough.

98. An avalanche of growth in digital
imaging now occurred.
30
25
20
15
10
5
0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

99. Products like Canon Ixus…

100. … And Nikon Coolpix now
flooded the market.

101. Film sales now decreased rapidly.

102. Those who had a razorblade
business model making
money on selling film now
faced shrinking revenues.

103. Kodak had to fire thousands
and thousands of employees.

104. Many buildings in
Rochester, NY, were
blown into pieces.

105. In Munich, Germany,
AgfaPhoto was
demolished.

106. Konica left the industry after
trying to survive through a
merger with Minolta.

107. Polaroid is also resting in peace.

108. But film manufacturers were
not the only ones in trouble.

109. The Nikon D1 from 1999 was the first
true alternative for photographers
who wanted digital cameras.
It was mortal to many of the old
camera firms…

110. With the rise of digital imaging, the
competence base shifted from
precise mechanics to electronics.

111. Many old camera companies had
little experience in electronics.

112. The competence base of
those firms now became
obsolete within a few years.

113. Hasselblad was in deep trouble.

114. And so was Leica.

115. The Agfa cameras
could not make it.

116. Kodak’s compact cameras were not
really competitive either.

117. As large consumer electronics
companies entered the industry,
competition became even fiercer.

120. Massive economies of scale
and R&D were needed to
survive in this industry and few
companies could keep it up.

121. To make things even worse, mobile
cameras started to disrupt the
compact cameras.

122. The reason:
Mobile cameras had reached a point
where they were good enough.

123. Summing it up:

124. Digital imaging destroyed the film
market and all those companies who
tried to keep making money on film.

125. At one time there must
have been dozens of
companies making
buggy whips. And I bet
the last one around
made the best buggy
whips you ever saw.
How’d you like being a
stockholder in that
company?
// Danny Devito, Other
people’s money

126. Those who owned stocks
in Kodak or Polaroid are
painfully aware of the
relevance of this quote.

127. In addition to this, digital imaging
turned the camera industry into a
chaotic warzone of fierce
competition and rapid development.

128. Many old companies with a
competence in precise mechanics
failed to renew their skills and could
not keep up with the pace of
development.

129. During the shift, some
companies claimed that
digital imaging could
never produce as good
photos as film.

130. Technically they may have
been right about this.

131. But that did not matter,
because digital imaging was
good enough, and had so
many other advantages.

132. Image attributions

133. Christian Sandström
www.christiansandstrom.org