Meanwhile, over in the United Kingdom, another subsidiary executive chimed in on DSLRs. This time it was a Kodak quote that triggered some Internet buzz (or in this case, negative buzz): "All the profits...are in the lens part of the business" Amateur Photographer reported VP John O'Grady citing as the reason Kodak decided not to enter the consumer DSLR market. Further in the article we get additional quotes backing that up from a Kodak UK exec.
Instead of Internet fans dreaming beyond reality, this time it is people at Kodak. I'm sure in Japan there was much guffawing upon seeing the quote (do Japanese executives guffaw? Perhaps they do so in private, as I've never seen them do it in public). Consider that at the low end Nikon ships their camera (D40) with a lens, and that the average DSLR consumer only purchases a grand total of slightly over two lenses over the lifetime of their ownership. Worse still, the average selling price of all those consumer DSLR lenses is less than US$250. I fail to see where all those lens profits come from. That's not to say that lens sales aren't profitable, but rather that "all the profits" do not come from lens sales. Otherwise, most of the kits that Nikon and Canon are selling these days would have to be considered loss leaders, and there's nothing in Nikon's or Canon's financial statements that even begins to suggest that is the case.
But let us assume for a moment that Kodak's executives are right, and that profits in consumer DSLRs come only from lenses. What Kodak just said could then be interpreted like this: "We decided that we didn't want to make lenses." I find that a curious statement. After all, there are lenses in all the other cameras Kodak produces (which number in the many millions a year).
Indeed, Kodak appears to be taking the same approach to consumer DSLRs as Fujifilm: instead of competing with the D40s and Digital Rebels of the world, they'll simply opt to tackle the so-called bridge camera, the DSLR-like all-in-one compact camera design. Funny thing is, last time I looked, that camera needed a pretty sophisticated lens design (the most recent one Kodak announced, the Z712, has a 36-423mm f/2.8-4.8 equivalent lens). Is all the profit in those cameras from the lens? I think not. Indeed, if it was, wouldn't you be better off producing a DSLR-like all-in-one compact camera with interchangeable lenses?
Sorry, Kodak, I don't buy your excuse. Somehow you're producing lenses for the cameras you do make, including several somewhat sophisticated ones (certainly as sophisticated as a consumer DSLR would need). You're either in the market or out. Kodak shareholders ought to vote you out if the you think the reason to not enter a market is that "all the profits are in lenses."
I still think my hypothesis is better: Kodak simply couldn't figure out what business they really were in at the film-to-digital switch, they under estimated how fast the switch would happen, they made the wrong investment decisions during the switch (e.g., buying Chinon to capture all aspects of design-to-production, then abandoning half of what they bought because they decided that approach was too costly), and they continue to take expensive random stabs at anything that nibbles away at something they perceive as their business (e.g. inkjet printers). Kodak doesn't have a clue how to continue as a consumer and professional imaging leader. Lenses are not the problem or the solution.
If the quote really reflects Kodak's thinking, they need some new thinkers.