Aiming for a Brighter Picture

Kodak zooms in on the home-video market

For Eastman Kodak, 1983 was the year the company's glossy image lost much of its luster. Profits of the world's leading maker of photographic equipment (1982 sales: $10.8 billion) plunged nearly 50% in the first nine months of 1983 as key products faltered both at home and abroad. The company, which prides itself on the warmth of its employee relations, had to make a series of painful layoffs. Kodak stock, meanwhile, sank 12.5% during the year despite the bull market, making it the worst performer among the 30 blue-chip issues in the Dow Jones industrial average.

But the Rochester, N.Y.-based giant has hardly been content to relax and let its dominance fade. Kodak spent much of the year preparing to invade the booming $9 billion market for home-video equipment. This week the company will launch its first attack, introducing a self-contained camera-videotape recorder that runs on narrow, 8-mm tape. The device will be smaller, lighter and easier to carry than most items now on the market, which use wider tape. Says Eugene Glazer, a leading photo-industry analyst for Dean Witter: "The new products are going to be very, very important. Small color-video-camera recorders will be the next big wave in consumer electronics."

Some experts are already predicting that Kodak, which accounts for about 60% of worldwide film sales, will quickly become a leader of the video field as well. But that eminence could be hard to achieve. Not only is the field already packed with formidable rivals like Sony, but new developments are occurring rapidly. In an apparent effort to upstage Kodak, RCA this week will unveil a palm-size video camera that comes with a separate recorder.

The new Kodak products are a key part of the company's all-out drive to sharpen its focus. Kodak, says Chairman

Colby Chandler, 58, is in "a time between eras" and requires "a clear vision of the road ahead." A genial man who wears a Ronald McDonald wristwatch and drives a pickup truck, Chandler has his eye on new, nonfilm technologies like picture-recording optical discs. Says Brenda Landry, an analyst with Morgan Stanley: "In a nutshell, Kodak is attempting to become a major participant in the emerging new forms of image making."

As part of its new push, the company has set aside its longstanding practice of developing all of its own products and has begun turning to outsiders for help. Kodak last fall bought Bell & Howell's DataTape division, which makes digital recording equipment. Last year it also acquired a Mead Corp. unit that makes ink-jet printing equipment. Industry insiders say that Kodak's new video-camera recorder was developed jointly with Japan's Matsushita.

Such forays may be overdue.