Kodak Ends Era With Sale

Kodak’s announced sale of its Organic Light Emitting Display business companies in South Korea has major implications for the company’s future, perhaps foreshadowing a takeover.

The industry mainstay pioneered OLED technology in the 1970s and has since built a portfolio of hundreds of patents resulting in licensing by manufacturers worldwide. Many analysts envision this technology as the standard display for decades.

And yet Kodak is exiting the development program?

Company officials, in a recent news release, claimed "OLED is one of the businesses we wanted to reposition to maximize Kodak’s competitive advantage at the intersection of materials and imaging science. This action is consistent with that strategy. Our OLED intellectual property portfolio is fundamental; however, realizing the full value of this business would have required significant investment."

Organic light-emitting diodes generate light on the screen's surface and don't have to be illuminated from behind; they don’t have a backplane. OLEDs are super-thin and consume less power than their non-organic LED counterparts.

AMOLED, or Active Matrix display, is a hybrid technology that pairs the active matrix backplane from a traditional thin-film transistor display with an OLED display. As a result, AMOLED displays have a faster pixel switching response time than do traditional displays and are not prone to ghosting when displaying moving animations.

Though Kodak invested heavily in the technology, the company decided this was not going to be its future. Instead, Kodak decided to pour most of its resources into inkjet technology.

William Napoli, director of Kodak’s Imaging businesses, was quoted as saying, “Kodak’s inkjet businesses are the future of the corporation.” Antonio M. Perez, CEO of Kodak, reportedly told the Wall Street Journal that consumer and commercial inkjet businesses were receiving the bulk of the company’s investments.

Even so, Kodak made significant strides in its OLED technology.

At The Society for Information Display, the company worked with Montreal-based Ignis Innovation and its Max-Life backplane technology. Together, they demonstrated a new, state-of-the art, 5-inch AMOLED display using white OLED with a RGBW matrix color filter and the Kodak deep-blue phosphor.

According to Display Daily, there also was progress on the solid-state lighting front. Kodak received a $1.7 million U.S. Department of Energy (DOE) contract in May for solid-state lighting development.

"Vapor Injection Source Technology allows manufacturers to significantly reduce unit-manufacturing costs, with high manufacturing throughput and material utilization that initially exceeds 50%, and could be greater than 75% in future manufacturing applications," according to the DOE, which gave Kodak an award for excellence for its project execution.

Dr. James Buntaine, CTO and vice president at Kodak OLED Systems, touted the future potential of its technology. "OLED solid-state lighting has tremendous potential to transform the future of the lighting industry -- enabling future lighting systems that are significantly lower-cost and more energy-efficient," he said.

So why did Kodak sell its future? Purely financial, and we think the pioneering giant is on the ropes.

The company reported first-half sales for Kodak’s Graphic Communications Group totaled about $1.3 billion, down 25 percent from a year earlier. The last quarter was not a whole lot better, and Kodak’s stock prices have been trading in a 52-week range of $2.01 to $7.66.

Kodak is betting on short-term success with printing pictures on paper, but for how long?

Certainly electronic displays are the wave of the future, and we think they will displace paper soon; maybe a generation or two, at best. It will be interesting to see how this dynamic plays out. We wouldn’t be surprised if Kodak becomes a takeover target in the next few years.

Note: This posting came to We Mean Business via TechMan, a contributor who monitors various industries.