The Wall Street Journal is reporting this week on the future plans of two corporations. As with any corporate news, there is a certain dry and brittle quality to it; most WSJ readers really only care how news will affect share prices. But there’s also high drama playing out. Right before our eyes, one company is withering away, while the other soars higher and higher.
Kodak is in bad shape: for starters, it declared bankruptcy last month. Adding insult to injury, Apple's now moved to reopen its patent lawsuit against the company, which had been halted given Kodak's Chapter 11 filing.
George Eastman introduced the first Kodak camera in 1888 and the company dominated the film and camera market. In 1975, 25-year old Kodak employee Steve Sasson invented the world’s first digital camera. All for naught. Kodak has announced that it will no longer make digital cameras. In particular, by not making digital cameras, it will save $100 million a year. Kodak will continue to make disposable film-based cameras and hopes to sell its name to other manufacturers. But when you save money by not making a core product, something’s very wrong.
Meanwhile, Google can do no wrong. For starters, it’s a verb. Doesn’t get much better than that. The Journal is reporting that Google may enter the home entertainment business, starting with a system that wirelessly streams music throughout the home; it will launch later this year. The consumer hardware would carry the Google name, the first time that’s happened. It’s not crazy to assume that it’s Android based, and you’ll use Android phones and tablets to control it. And I bet that somehow Google TV and Google Music will be involved. Clearly Google is trying to pull an Apple by tightening control of its technology and branding its own stuff.
The transition from an analog world to a digital one is steadfastly sorting out the winners and the losers. A dying Kodak is exiting the camera business and a thriving Google is entering the music playback business. Kodak’s news has a sense of inevitability about it. When you’re in bankruptcy, your options are limited. Google’s news is unexpected, and even seems a little odd. There’s great potential there, and some risk too. Music streaming hardware. A frivolous shot in the dark, or part of a grand strategy? Just the kind of home entertainment that investors are looking for.
Ken C. Pohlmann is well known as an audio educator, consultant, and author. He is a professor emeritus at the University of Miami in Coral Gables, and the author of numerous articles and books, including Principles of Digital Audio and Master Handbook of Acoustics.
Copyright © 2013 Bonnier Corp. All rights reserved. Reproduction in whole or in part without permission is prohibited.