[Leica] Visit to Kodak results

[lrzeitlin at gmail.com (Lawrence Zeitlin)]

I'm off to Rochester to attend a seminar on the future of digital
photography. This is an annual Kodak technical briefing for its management
and Wall Street types. I received the invitation because Kodak was a former
client of mine and my name probably didn't get taken off the list. I don't
pretend to be an expert on digital technology. But then neither will most of
the attendees. I just hope whatever they learn raises Kodak stock prices.
I'll report on what I found out in a couple of days.

Larry Z

- - - - -

Here is what I learned:

It was the day before Kodak's quarterly report. A Kodak representative tried
to lessen the impact by telling the Wall Street types that 2011 would be a
struggle with a slowing digital camera business adding to Kodak's woes. Wall
Street showed little sympathy. Kodak stock is down 56% for the year. Kodak
sales are $1.5 billion with a loss of $224 million, This is worse than last
year. The shares dropped 7% today. Kodak stock is now $2.33 per share. A few
years ago is was $88 per share. And so goes the photography business.


The finance guy's presentation was followed by that of a Kodak engineer. He
discussed the future of Kodak's digital efforts, but was less than sanguine.
Although Kodak was heavily involved in digital research, the pace of sales
has slowed. He suggested that this was probably due to the early remarkable
growth of digital photography. The market became saturated much sooner than
anyone expected. More important, the rate of replacement of equipment is low
and, unlike film, there are few consumables. Everyone who wants a digital
camera probably has one already. Ten megapixel cameras with zoom lenses cost
less than $100. Apparently the Photo Kiosk business has bombed. People just
show pictures on smartphones, iPads, or on their computers. Except for
Grandma and Grandpa.


By a curious coincidence the engineer had been a student in one of my
graduate classes twenty years earlier. I didn't recognize him but after his
talk he came up to me and reintroduced himself. We adjourned to the hotel
bar for a beer. It was a hot day. After catching up on trivia I asked  him
what he felt lay in the future for high end digital cameras. He had been on
the design team for the sensory array used in the Leica M8 and had
contributed to the M9 design.


He told me that the Leica back focus constraint greatly handicapped the
design efforts. Leica was correct in saying that making a digital M camera
would be difficult. The microlens array was an  inelegant solution. He felt
that the production cost and alignment of the microlens array surmounting
the Leica full frame sensor was a major contributor to the price of the
Leica M9.


The engineer felt that the M9 was a wonderful photographic instrument,
capable of the finest results. It's just that, as Leica said all along,
making a camera with a full frame sensor to be used with lenses with a 29mm
flange to image distance and capable of exploiting the best characteristics
of Leica glass is an expensive proposition. Without exception, all the other
cameras capable of mounting Leica lenses, either with or without an adapter,
have smaller sensor sizes. This includes the Leica M8 with a 1.33 crop
factor,  cameras with the APS-C sensor with a 1.6 crop factor. and Olympus
and Panasonic  cameras sporting a 4/3 sensor with a 2.0 crop factor. This is
pretty much what the Stephan Daniel interview implied. There may be other M
mount, smaller sized, cheaper Leicas  and automatic, new lens mount Leicas
yet to come. Sensor design is improving fast and smaller sensors have
adequate resolution to exploit the characteristics of the best lenses.


I never got a chance to ask him if the Leica M9 (or perhaps the M10) was the
end of the line? Given Kodak's partnership with Leica, I'm sure he didn't
want to answer.


Larry Z