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Kodak, once Mecca of chemistry, now embraces digital tech

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  • Steven J SASSON, an electrical engineer who invented the first digital camera at Eastman Kodak in the 1970s, remembers well management’s dismay at his feat.

    “My prototype was big as a toaster, but the technical people loved it,” Mr. Sasson said. “But it was filmless photography, so management’s reaction was, ‘that’s cute — but don’t tell anyone about it.’ “

    Since then, of course, Kodak, which once considered itself the Bell Labs of chemistry, has embraced the digital world and the researchers who understand it.

    “The shift in research focus has been just tremendous,” said John D Ward, a lecturer at the Rochester Institute of Technology who worked for Kodak for 20 years. Or, as Mr. Sasson put it, “Getting a digital idea accepted has sure gotten a lot easier.”

    Indeed, physicists, electrical engineers and all sorts of people who are more comfortable with binary code than molecules are wending their way up through Kodak’s research labs.

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    Kodak is by no means thriving. Digital products are nowhere near filling the profit vacuum left by evaporating sales of film. Its work force is about a fifth of the size it was two decades ago, and it continues to lose money. Its share price remains depressed.

    But, finally, digital products are flowing from the labs. Kodak recently introduced a pocket-size television, which is selling in Japan for about $285. It has software that lets owners of multiplexes track what is showing on each screen. It has a tiny sensor small enough to fit into a cellphone, yet acute enough to capture images in low light.

    The company now has digital techniques that can remove scratches and otherwise enhance old movies. It has found more efficient ways to make OLEDs — organic light-emitting diodes — for displays in cameras, cellphones and televisions.

    This month, Kodak will introduce Stream, a continuous inkjet printer that can churn out customized items like bill inserts at extremely high speeds. It is working on ways to capture and project three-dimensional movies.

    And, of course, it continues to prompt consumers to take pictures with Kodak cameras, store them at Kodak sites online, display them in Kodak digital picture frames and print them on Kodak printers that use Kodak inks and papers.

    Paradoxically, many of the new products are based on work Kodak began, but abandoned, years ago. The precursor technology to Stream, for example, pushed ink through a single nozzle. Stream has thousands of holes and uses a method called air deflection to separate drops of ink and control the speed and order in which they are deposited on a page.

    It took what many analysts say was a near-death experience to change Kodak from letting digital technologies languish. Kodak, a film titan in the 20th century, entered the next one in danger of being mowed down by the digital juggernaut. Electronics companies like Sony were siphoning away the photography market, while giants like Hewlett-Packard and Xerox had a lock on printers.

    But in 2003 Kodak hired Antonio Perez away from Hewlett-Packard. Mr. Perez, now the chief executive, has sprinkled Hewlett alumni — including Lloyd and Faraci — throughout the executive suite. Together, they have turned Kodak inside out. They exited a mainstay business, health imaging, and took the company back into inkjet printing. And they mined the patent archives for intellectual property, a step that is yielding well above $250 million a year in licensing fees.

    Researchers at Kodak also must now work with the business managers. Amit Singhal, a computer scientist who joined Kodak in 1998, said he had biweekly meetings with the business units. “I never used to see them at all,” he said.

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