Kodak finds a life preserver

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The digital camera revolution left film maker Eastman Kodak (EK) in the dust. Two years ago, its stock traded above $29. It now changes hands at $2.80. Each new quarter seems to bring worse results and more lay-offs.

To make up for some of the lost ground, Kodak has gone into the consumer printer business, probably hoping that its brand will help drive sales. It is a risky move. HP (HPQ) and a number of other large PC and consumer electronics companies are in essentially the same business.

Kodak's CEO says his company has an advantage. The Wall Street Journal reports that "Kodak designed its inkjet printers with expensive silicon technology inside the machine, rather than on individual ink cartridges." The company assumes that if it undercuts its competition on cartridge prices, consumers will view this as a long-term savings, and Kodak will have a chance to pick up market share.

The move may be the only way for Kodak to get out of its death spiral, but it faces large competitors that have been in the market for years. Kodak has a history of being a day late and a dollar short. That has not changed. Kodak has so many problems that, if its printer gambit does not work, it may not be around in a few years.

Douglas A. McIntyre is an editor at 24/7 Wall St.

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