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Thread: Kodak Gets out of Sensor Business

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    Member Lee Love's Avatar
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    Kodak Gets out of Sensor Business

    Well it looks like Kodak has gotten out the sensor business. It will be interesting to see how this affects the MF industry.

    Who knows what cameras are using the Kodak sensor ?

    Lee


    ROCHESTER, N.Y. — Eastman Kodak Co. says it has completed the sale of an image sensor business to a private equity firm in Beverly Hills, Calif.

    The photography pioneer is offloading what it calls "non-strategic assets" in a scramble to reinvent itself as a profitable player in digital imaging and printing.

    Financial terms of the sale to Platinum Equity were not disclosed Monday.

    But CEO Antonio Perez said last week that Kodak has already booked $120 million in asset sales this year and expects to reach $200 million by year-end.

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    Re: Kodak Gets out of Sensor Business

    Leica M9, S2, and Pentax 645D. BTW, the sensor company is not going out of business, it is simply being sold. There is no reason to suppose it would stop production for important clients.

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    Member Lee Love's Avatar
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    Re: Kodak Gets out of Sensor Business

    Shashin, not sure I understand the difference. Doesn't this mean that Kodak will no longer be producing sensors and that another company will take over design and production of these products ?

    I didn't say the sensor company was going out of business, just that it sounds to me like Kodak will no longer be involved.

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    Re: Kodak Gets out of Sensor Business

    Kodak business that made the sensors is no longer owned by Kodak, but that business is still producing products. So this is most likely bad news for Kodak--I can't think of a good spin on this. But as far as the companies that are relying on the sensors, I see no problem with supplies nor for the business making them.

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    Re: Kodak Gets out of Sensor Business

    they were actually bought buy a private equity firm. which means they got a deal. these guys will clean up the business and then sell it. if hassi has money it would be a good investment.

    same thing happened with skype, it was bought from apple , cleaned up and then sold to microsoft for a lot more money.

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    Senior Member doug's Avatar
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    Re: Kodak Gets out of Sensor Business

    Quote Originally Posted by msadat View Post
    ... if hassi has money it would be a good investment....
    Not sure I like this idea... Leica would be looking for a new sensor supplier.

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    Re: Kodak Gets out of Sensor Business

    Quote Originally Posted by doug View Post
    Not sure I like this idea... Leica would be looking for a new sensor supplier.
    I expressed the same concern in the recent Leica S2 thread in this forum.

    Although, it sounds like a good idea from the perspective of the buyer (Platinum Equity). They may be able flip it to the highest bidder at some point, maybe Hasselblad maybe Leica maybe Pentax or maybe even Phase One. Whoever ends up owning it may be able to exploit an in-house advantage, or at least apply some market pressure in terms of controlling sensor availability.

    The strategy for the camera/back makers should now be clear ... make sure they can switch to a competitive chip (Dalsa) without forcing customers to buy new cameras/backs.

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    Re: Kodak Gets out of Sensor Business

    Not sure this is good news anyway you slice the cheese. New investors do some strange things sometimes and its not always good news. Than again it could be a good thing. In this case i'm not so sure I am leaning on the positive side of it. Kodak did a nice job they no longer control it, really is that simple.
    Photography is all about experimentation and without it you will never learn art.

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    Member Agnius's Avatar
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    Re: Kodak Gets out of Sensor Business

    I don't think Skype was ever associated with Apple. It was developed by Estonian programmers back in the day.

    Why Kodak sold their sensor division? Probably it was bleeding cash so it had to go. Probably it was not profitable. What happens next - they will need to turn around the company into black (if Kodak could have done it they would have done it already) or put it on the chopping block and sell it piece by piece. I am sure Apple, Google and Samsung will be fighting for patent portfolio...

    Quote Originally Posted by msadat View Post
    they were actually bought buy a private equity firm. which means they got a deal. these guys will clean up the business and then sell it. if hassi has money it would be a good investment.

    same thing happened with skype, it was bought from apple , cleaned up and then sold to microsoft for a lot more money.

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    Senior Member Graham Mitchell's Avatar
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    Re: Kodak Gets out of Sensor Business

    Quote Originally Posted by Agnius View Post
    Why Kodak sold their sensor division? Probably it was bleeding cash so it had to go. Probably it was not profitable.
    I was under the impression that the sensor division was profitable, which is why it was easier to sell than some other divisions. Kodak is desperate for cash at the moment to stay afloat.

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    Re: Kodak Gets out of Sensor Business

    Quote Originally Posted by Agnius View Post
    I don't think Skype was ever associated with Apple. It was developed by Estonian programmers back in the day.

    Why Kodak sold their sensor division? Probably it was bleeding cash so it had to go. Probably it was not profitable. What happens next - they will need to turn around the company into black (if Kodak could have done it they would have done it already) or put it on the chopping block and sell it piece by piece. I am sure Apple, Google and Samsung will be fighting for patent portfolio...
    Whether it was profitable or not, may not be the underlying reason ... maybe it depends on Kodak's long term plan and their need to raise capital ... selling less profitable (less profit volume) assets is a way to accomplish that. What I can't figure out is what business Kodak will be in? It isn't film, and now it isn't digital imaging sensors ... what do these guys do for a living?

    Interesting times.

    -Marc

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    Administrator Bob's Avatar
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    Re: Kodak Gets out of Sensor Business

    Consider too that it is hard to sell something that nobody wants.
    -bob

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    Re: Kodak Gets out of Sensor Business

    The timing of this sale cannot be better planned
    This press release came out a week ago, I expect more to be revealed later this week during Vision 2011

    Yair

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    Re: Kodak Gets out of Sensor Business

    If Kodak kept the sensor production and went out of business then most likely there would be no more Kodak sensors. With it being sold to an investment firm they're going to build the company up to be a stronger and more profitable company which will continue to make sensors. Even if they flip it the new company will make sensors. Even if Hasselblad bought it would be foolish to cut off a segment of customers like Pentax and Leica. Business is all about making money by expanding the market / customer base.

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    Re: Kodak Gets out of Sensor Business

    Its also about completely changing the business and in this case the small MF market and M9 market it may make much more sense to look at more consumer low end devices to support. Much more money in making P&S and lower end camera's than our market by a country mile. Seriously just think iPhone and having 5 million sensors to make or whatever that number maybe. Its about profit over and above costs to produce. the margins could be just so much higher to go low tech and in massive devices. Lots of possibilities here and I don't look at any of this with rose colored glasses. 35 years ago look at all the photo companies compared to how many today. It's staggering how many have hit the gutter.
    Photography is all about experimentation and without it you will never learn art.

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    Re: Kodak Gets out of Sensor Business

    The odd part is that Kodak sold their patents in April so what did the equity firm actually purchase ?

    "In April, Kodak sold 850 image-sensor patents and patent applications for $65 million to image-sensor maker OmniVision Technologies."

    http://en.wikipedia.org/wiki/OmniVision_Technologies

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    Re: Kodak Gets out of Sensor Business

    Quote Originally Posted by Guy Mancuso View Post
    Its also about completely changing the business and in this case the small MF market and M9 market it may make much more sense to look at more consumer low end devices to support. Much more money in making P&S and lower end camera's than our market by a country mile. Seriously just think iPhone and having 5 million sensors to make or whatever that number maybe. Its about profit over and above costs to produce. the margins could be just so much higher to go low tech and in massive devices. Lots of possibilities here and I don't look at any of this with rose colored glasses. 35 years ago look at all the photo companies compared to how many today. It's staggering how many have hit the gutter.
    I guess nobody is holy. I was very surprised to see Agfa go the way of the Dodo, but business model that worked in old days might not be adequate in the days of the Google. I see that there is only so much money to go around and it is not enough for everybody, so some players have to strike out so others can continue to play.

    Best of luck to Kodak, but I am not holding my breath.

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    Re: Kodak Gets out of Sensor Business

    What is interesting about this is Kodak sold 850 imaging sensor patents to OmniVision Technologies back in April. So I wonder what is it they actually sold to the equities group.

    http://en.wikipedia.org/wiki/OmniVision_Technologies

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    Re: Kodak Gets out of Sensor Business

    I'm pretty sure Skype was bought by E-Bay, then wandered around within the abyss that is that company, was then floated back into the market as its own entity, before being acquired by Microsoft.

    But, I could be plenty wrong, there's loads I forget lately.

    Quote Originally Posted by Agnius View Post
    I don't think Skype was ever associated with Apple. It was developed by Estonian programmers back in the day.

    Why Kodak sold their sensor division? Probably it was bleeding cash so it had to go. Probably it was not profitable. What happens next - they will need to turn around the company into black (if Kodak could have done it they would have done it already) or put it on the chopping block and sell it piece by piece. I am sure Apple, Google and Samsung will be fighting for patent portfolio...

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    Re: Kodak Gets out of Sensor Business

    Quote Originally Posted by sirimiri View Post
    I'm pretty sure Skype was bought by E-Bay, then wandered around within the abyss that is that company, was then floated back into the market as its own entity, before being acquired by Microsoft.

    But, I could be plenty wrong, there's loads I forget lately.
    Sure, it was EBay, not Apple. Ebay bought Skype then could not figure out what to do with it. Happens to everyone, but at least they made money on the sale to Microsoft.

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    Re: Kodak Gets out of Sensor Business

    Quote Originally Posted by Guy Mancuso View Post
    Its also about completely changing the business and in this case the small MF market and M9 market it may make much more sense to look at more consumer low end devices to support. Much more money in making P&S and lower end camera's than our market by a country mile. Seriously just think iPhone and having 5 million sensors to make or whatever that number maybe. Its about profit over and above costs to produce. the margins could be just so much higher to go low tech and in massive devices. Lots of possibilities here and I don't look at any of this with rose colored glasses. 35 years ago look at all the photo companies compared to how many today. It's staggering how many have hit the gutter.
    Yes, it will be interesting to see how this all shakes out.

    There are a number of companies involved in making the smaller sensors for the mass quantity devices ... MacRumors has identified Sony as a supplier for the iPhone 4s ... 90% of which was originally thought to be allocated to OmniVision ... to what degree Sony is involved is yet to be determined, but it is a very competitive area and OmniVision's weak financial management and missed production deadlines is thought to be Sony's big foot in the door. The fact that Sony introduced the back illuminated sensor technology 2 years ago that is now in the iPhone 4s may have something to do with it.

    BTW, that back illuminated sensor technology apparently has significantly improved low light performance on the iPhone 4s, and now Schneider has announced a high performance lens set kit for use on smart phones. I think regular P&S cameras are headed for Dodo land.

    Then there is the possibility of a game changer ... like InVistage Inc's new Quantum Film ...

    "The new semiconducting material was invented by Univeristy of Toronto professor Ted Sargent, who is now chief technology officer at InVisage. Sargent perfected a method of suspending lead-sulfide nanoparticles in a polymer matrix to form a new class of semiconducting polymer that Invisage has spent the last three years integrating into a standard CMOS process. Now it can paint quantum film atop a low-cost wafer that has the electrode array for super-dense high-pixel-count images, but without any of the expensive CMOS photodetectors that make up the bulk of conventional digital camera sensors.

    "Our quantum film replaces the silicon used for image capture, but what we have really created here is a new semiconductor material," said Jess Lee, InVisage president and CEO. "Our quantum film even looks like photographic film—an opaque black material that we deposit right on the top layer of our image chip."

    InVisage could have the next generation image sensor. "It gathers more light so you can either make a smaller image sensor for a less expensive cell phone camera, or you make a higher resolution sensor for high-end digital cameras," Marshall said. "It's a huge step forward and the market is also huge, so they will also need to overcome the problems facing any small company when trying to penetrate a large market."

    Maybe with all this turmoil, this technology can also get its foot in the door?

    The times they are a changing ...

    -Marc

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    Re: Kodak Gets out of Sensor Business

    While the first response to the sale may be negative i.e. what happens to Leica, Hassy et al who use the Kodak sensors the truth is that it creates a vacuum in the MF sensor area and vacuums are always filled. InVisage as Marc points out may be one of the new players and who knows what Platinum Equity has in mind. Sony may well be interested in MF sensors and certainly has the technologies to pursue it.

    In the meantime, the old stalwart Dalsa is available to all concerned so life in the MF world should continue to be great. Just MHO

    Woody

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    Re: Kodak Gets out of Sensor Business

    i meant to say ebay and not apple

    why should leica look for a new supplier cause the owners have changed.


    Quote Originally Posted by Agnius View Post
    I don't think Skype was ever associated with Apple. It was developed by Estonian programmers back in the day.

    Why Kodak sold their sensor division? Probably it was bleeding cash so it had to go. Probably it was not profitable. What happens next - they will need to turn around the company into black (if Kodak could have done it they would have done it already) or put it on the chopping block and sell it piece by piece. I am sure Apple, Google and Samsung will be fighting for patent portfolio...

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    Re: Kodak Gets out of Sensor Business

    the new owners (i don't think) but the sensor business to shelf it but rather expand, make it better and sell it for a profit since this is what these guys do. i don't know why people look @ it as negative or that it has created a vacuum. its all there under a company who has a lot more money than kodak.

    kodak is going out of business and the board of directors/management rather than sell the company as whole, are piece mealing it and holding on to their fat salaries and bonuses at the expense of shareholders. bad

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    Re: Kodak Gets out of Sensor Business

    It seems very clear what the motivation is in this case.

    Kodak is hemorrhaging cash and considers their broad and valuable patent portfolio their single greatest asset. This is widely acknowledged in the business media and their public statements.

    In such a position it makes a lot of sense for Kodak to sell off non-core-areas of their business to generate the cashflow needed to sustain operations (avoid bankruptcy) while they determine how best to leverage their patent portfolio.

    I really don't think this development (by itself) should be taken as either a positive or negative indication of the sensor business in general nor the markets it services.

    If anything, it's a good thing for the sensor division to be operating under someone new so that they won't be restricted by the cashflow issues at Kodak. Being part of a large diverse conglomerate is a great advantage - when the conglomerate is healthy; in this it was more like a fair maiden being chained to the mast of a sinking ship.

    References:
    5-year stock chart
    3 Years of Annualized Operating Cashflow Decline
    Biz. News/Opinion Article on Kodak Selling Sensor Division to Raise Cash
    Quote from CEO on selling Non-Strategic Assets to raise cash to avoid bankruptcy in short term.

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    Last edited by dougpeterson; 10th November 2011 at 03:07.

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