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The Financial Times has a great piece about the long decline of Eastman Kodak, which has seen its stock price, market capitalization and share of the consumer market plummet over the years.

The story is framed like this:

“Received wisdom has it that Kodak is just one more victim of the digital age. That is only half true. The more instructive half has to do with the concept of disruptive technology, which is not quite the same thing.

“Properly defined, a disruptive technology is cheaper than the existing version and initially not as good. For established players, this poses an acute cultural problem. They got where they are by giving their customers what they wanted at the highest practicable quality. Faced with a cheap and dirty alternative, they may address the challenge, but it goes against the grain to devote resources to it.”

In this case, the disruptive technology was digital photography.

In the mid-nineties, the story goes, “Kodak’s then chairman, George Fisher, was in an excellent position to know better. A technologist to his fingertips, he had recently moved from running Motorola. But faced with the stubborn Kodak reality, he took an awkward halfway position.

“Film would co-exist with digital. If nothing else, he was cheaper. A picture taken with Kodak’s top-of-the-range digital camera would print out on silver halide paper with no loss of quality. But the camera cost $27,000. Even Kodak’s cheapest, with a poorer image than film, cost $1,000.

“That would change, he conceded. But ‘the popular scientists get carried away with the pace of those things’.”
KC's View:
Now, of course, people don’t even need cameras to take digital photos.

Just phones.

It is instructive that Kodak, according to the story, did not attend the annual Consumer Electronics Show until 2004.

And one other thing. Nobody should ever suggest that “the popular scientists get carried away with the pace of those things.” Because if we’ve all learned anything over the past couple of decades, it is that the pace of such disruptive change usually goes faster than we expect, not slower.