SIC 3861
PHOTOGRAPHIC EQUIPMENT AND SUPPLIES



This classification includes establishments primarily engaged in manufacturing photographic apparatus, equipment, parts, attachments, and accessories utilized in both still and motion photography. Also covered in this classification are establishments primarily involved in manufacturing photocopy and microfilm equipment, blueprinting and diazotype (white printing) apparatus and equipment, sensitized film, paper, cloth, and plates, and prepared photographic chemicals.

Those establishments involved in manufacturing products that are related to the photographic industry, but are not grouped in the photographic equipment and supplies classification, include manufacturers of unsensitized photographic paper stock, and paper mats, mounts, easels, and folders utilized for photographic purposes. These establishments are classified within the paper and allied products industry. Photographic lens manufacturers are classified in SIC 3827: Optical Instruments and Lenses, and manufacturers of photographic glass are delineated in the stone, clay, glass, and concrete products industry. Also excluded are manufacturers of chemicals produced for technical purposes that are not specifically prepared and packaged for use in photography and those manufacturing photographic flash, flood, enlarger, and projection lamp bulbs. The former are classified within chemicals and allied products, and the latter are classified in SIC 3641: Electric Lamp Bulbs and Tubes.

NAICS Code(s)

333315 (Photographic and Photocopying Equipment Manufacturing)

Industry Snapshot

There are more than 400 establishments manufacturing photographic and photocopying equipment who shipped over $9.1 billion worth of merchandise in 2000. About 31 percent of these establishments employed at least 20 people. The largest concentrations of facilities in this classification were in California, Illinois, New Jersey, and Pennsylvania.

Growth in the photographic equipment and supplies industry was usually fueled by the introduction of new products that featured innovative technology. In addition, when people bought still and motion camera equipment, they also tended to buy film and related supplies. Because most photographic equipment and supplies were considered leisure or nonessential goods, the industry was particularly sensitive to economic conditions. The industry produced such a broad range of goods, however, that it was somewhat insulated from market fluctuations. For example, still picture film and photocopying equipment typically sold consistently despite economic downturns.

The driving factor in this sector in the early 2000s was digital, with digital cameras getting ever smaller, simpler, more powerful, and less expensive. In 1999, there were 2.2 million digital cameras sold compared to 17.8 million conventional cameras sold. By 2002, digital was catching traditional cameras fast, with approximately 9.4 billion digital cameras sold, compared to 14.2 million conventional cameras. People embraced digital for a number of reasons, including never before offered options like previewing or erasing photos, the ability to download photos directly to a computer for e-mailing or storing to an online album, and capturing high resolution, quality images. Digital camcorders and printers were also getting more advanced, less expensive, and more popular.

Organization and Structure

The photographic equipment and supplies industry was comprised mostly of small manufacturing operations. In the late 1980s, most of the facilities had been concentrated in the mid-Atlantic states, but by the early 1990s the industry was beginning to spread out across the country.

Background and Development

Although photographic equipment and supplies first became available to consumers in the 1880s, it was not until the 1950s that the industry's sales grew rapidly. This was a defining decade for the photographic industry, characterized by a significant increase in consumers' disposable income, the emergence of photocopying and microfilming products as lucrative components within the industry, and the development of still cameras that were easy to operate.

Many of the technological achievements that eventually led to this growth surge were accomplished by Eastman Kodak Company. In the late 1870s, Kodak's founder, George Eastman, had adapted a photographic process that replaced wet-plate developing chemicals and equipment with a dry-plate process. Cleaner to operate and generally easier to use than wet-plate cameras, Eastman's dry-plate system was the first step toward making photographic equipment available to all consumers. Eastman said he intended to make the camera affordable and "as convenient as the pencil." Next, Eastman began widespread marketing of roll film, a product that had been developed by film and camera manufacturer Reverend Hannibal Goodwin.

To interest consumers in photography, manufacturers of this era improved the performance of cameras and the quality of film. A giant leap toward this goal was taken in 1900 when Kodak introduced the first model of its popular, inexpensive, and easy-to-operate Brownie line of cameras. Retailing for $1, the first Brownie signaled the beginning of affordable cameras with massmarket appeal. Kodak later developed products to diversify the applications of photographic equipment. The first 8 millimeter (mm) motion picture system designed for the amateur photographer entered the market in 1932, followed by color film three years later.

Additional products that were intended to spark interest in amateur photography soon emerged, but after World War II they were overshadowed by the introduction of film that could be developed instantly. The inventor of this new film-development process was Dr. Edwin H. Land, the founder of Polaroid Corporation. Launched in 1947, the first instant camera and film marked the beginning of Polaroid's rise toward multibillion dollar sales.

Meanwhile, manufacturers improved their products, consumers grew accustomed to using photographic equipment, and the economic and population boom of the 1950s ignited photographic sales. According to industry estimates, purchases of photographic products more than doubled during the decade, jumping from less than $500 million in 1950 to $1.2 billion by 1960. This was partly attributable to the robust national economy following the war, which provided consumers with more money to spend on photography. The high birth rate was also a factor, because parents often purchased cameras and film to photograph their children—the subject of approximately 55 percent of the 2.2 billion photographs taken in 1960.

Kodak held a virtual monopoly of the photographic industry from the turn of the century through this period, perennially controlling roughly 90 percent of the film market and an overwhelming share of the camera market. In the early 1950s, the federal government filed an antitrust suit against Kodak that resulted in a consent decree in 1954. Part of Kodak's dominance before the decree was attributable to a film-processing fee that was automatically included with every Kodak film purchase. By including a built-in processing fee, Kodak in effect cornered the processing end of the industry and consequently discouraged any competition for its film manufacturing business, because the dearth of alternative processing facilities inhibited film sales by other manufacturers. This practice ended in 1954, however, when Kodak agreed to sell film without a processing charge and to license other processing companies to develop Kodak film and prints. Although Kodak maintained its grip on the industry, other companies began to enter a market that had been essentially closed to competition.

Meanwhile, competitors were scurrying to secure a foothold in the fledgling photocopying market, which also promised to be a lucrative enterprise. Although photocopying sales did not exceed $100 million until 1958, revenues increased rapidly when a product was developed for office use. Photocopiers were primarily targeted toward industrial users during the 1950s, but new technology enabled manufacturers to make smaller machines suitable for the business community. Each of the market leaders manufactured photocopiers that operated on a different photocopying process. Controlling roughly one third of the market each, Minnesota Mining and Manufacturing and Kodak used thermofax and verifax processes, respectively. American Photocopy Equipment Company, the third-largest manufacturer, used a diffusion transfer process. In the end, however, these types proved inferior to the process marketed by Xerox Corporation. Xerography featured electrostatic dry copying that replaced the chemicals used in the other photocopying machines with a cleaner process that required no specially manufactured paper.

Photocopiers that used xerography grew from 1 percent of Xerox's total sales in 1950 to more than 60 percent in 1960, causing exponential growth throughout the industry. Other companies that followed Xerox's lead into electrostatic copying included American Photocopy, Charles Bruning, BBM Photocopy, and Smith Corona Corporation. The pace of this growth quickened with the introduction of the Xerox 914 office copier in 1960, which enabled rapid duplication of documents for business offices, a task that previously had to be completed manually. Within three years Xerox's sales more than tripled, and annual sales for the industry as a whole soared to $500 million. By this time the market was heavily contested among more than 100 competitors. Many were still not convinced of xerography's merits and continued to manufacture wettype machines. This issue was soon settled by the response of the industry's business customers, and photocopiers rapidly became an indispensable accessory for nearly every office in the United States.

Meanwhile in the photographic market, another innovative product emerged—the Instamatic camera. First marketed by Kodak in 1963, the Instamatic camera and film formed an integrated system that made photography simpler for consumers. A film cartridge popped into the camera's back, eliminating the task of threading film into the camera. The camera featured a rapid-action lever that advanced the film and automatically positioned it for each exposure, eliminating the inaccurate and awkward winding knob found on earlier cameras. Some innovations of the camera and film had been developed as far back as the 1940s, but never before had so many convenient features been combined into a single product.

Mysteriously named Project 13, the development of Kodak's Instamatic was shrouded in secrecy, catching all of its competitors by surprise and heightening the camera's popularity. Within two years approximately 7.5 million Instamatics were sold. Kodak estimated that the average camera owner purchased four rolls of film a year, but with the easy-to-use Instamatic, consumers increased their purchases to eight rolls a year.

During this time, the photographic industry also experienced a considerable boost from industrial and government purchases. As photographic technology advanced, the useful applications of photographic equipment in factories and for high technology purposes broadened, making the development of more sophisticated products almost as lucrative as the development of simple products. Equipment that could take as many as 5,000 photographs per second was used to identify product inconsistencies occurring along production lines and to improve the design of industrial products. Cameras were also used inside missiles to photograph foreign countries for military purposes, inside layer cakes to improve leavening agents manufactured by chemical companies, and aboard rockets to record details of the moon's surface. Sales to industries and government organizations increased from $360 million in 1959 to $630 million in 1964, which represented nearly half of the $1.4 billion photographic industry's revenues for that year.

By the 1970s, photocopying had become a $1 billion-a-year business, with Xerox in the lead. In 1963 Xerox followed the 914 model with a smaller version, the 813, and subsequent models entered the market throughout the rest of the decade. Photocopying technology advanced rapidly during these years, increasing the production output of the machines and reducing their size, which heightened the popularity of photocopiers in business and government offices.

In 1970 Xerox began marketing the Model 4000 photocopier, which churned out 45 copies a minute, or 2,700 an hour, compared to the approximately 1,000 copies the 914 could produce in a day. Its two paper trays could hold different sizes and types of paper, and it could automatically copy to both sides of a sheet of paper. Xerox was not the only pioneer in the photocopying equipment market, however, and consumer demand increased as other manufacturers developed attractive features for their machines. This meant more revenue for industry participants and more competition from companies in related businesses. Competition intensified for the remainder of the decade, and Xerox began to cede a large portion of its commanding lead to domestic and foreign competitors.

The microfilm market also expanded during the early 1970s, fueled by the growing popularity of computers in business and government. Computers became capable of storing massive amounts of data. One reel of magnetic computer tape stored enough information to fill 3,500 pages of paper, a task that took impact printers nearly four hours to complete. This new technology proved a perfect match for micrographic technology's ability to reduce documents to a fraction of their original size, because the same amount of information could be placed on microfilm in 12 minutes. This process, a fusion of micrographics and computer technology known as computer-output microfilm (COM), eventually boosted the microfilm market considerably. Sales were sluggish until Minnesota Mining and Manufacturing and Kodak, two of the leading companies in the microfilm market, opened a successful network of regional COM centers in 1971.

Micropublishing was another area in which microfilming equipment performed well during the 1970s, although this segment generated revenues of only $50 million a year at the start of the decade. The nation was producing and storing documents at an accelerating rate. Bank checks were microfilmed, newspapers and periodicals were microfilmed for storage in libraries, and many businesses needed to consolidate the plethora of documents they produced each year. In the early 1970s, the microfilm market grew at a rate of 18 percent annually and evolved into a $500 million a year business. This decade established the foundation for future growth as computer usage became more pervasive and the nation moved into the information age. By early 1997, most companies involved in microfilm were moving into CD-ROM. Instead of putting information onto microfilm, they would scan it into digital format to be placed onto a CD-ROM. This allowed consumers to store more information on a disk and to access and print it faster with a personal computer.

Entering the 1980s, manufacturers of conventional film, paper, and cameras began to suffer the effects of a saturated market and foreign competition. Nearly every industry leader reorganized extensively to capitalize on the trend toward electronic imaging products. Several products that featured the new technology emerged in the mid-1980s, including Sony Corporation's electronic still camera called the Mavica, Canon Incorporated's Xapshot, and Fuji Photo Film Company's Fujix, but sales were disappointing. One product that did sell well, however, was the camcorder, which was introduced in 1983. Within two years 500,000 units were sold, a remarkable success, considering that each unit cost an average of $1,000. By 1990, unit sales exceeded three million.

By the mid-1990s electronic imaging was dramatically changing the photographic equipment and supplies industry. This new technology used semiconductor sensors instead of film to record images and then displayed the images on television screens or computer monitors rather than paper. Although some worried that the new format would entirely supplant conventional photographic equipment and supplies, others predicted that electronic imaging would merely augment the existing market. Initially, electronic imaging products were prohibitively expensive, and the quality of images was far inferior to what could be achieved with film, but by the late 1990s the digital field began to explode. Digital point-and-shoot cameras were being sold at prices as low as $300 to $500, compared to $20,000 for the professional style cameras that had previously been the only type available. The new hand-held digital cameras had relatively poor resolution but gained popularity quickly, with sales of digital equipment doubling annually. In 1995, 500,000 digital cameras were sold. That number jumped to 1.2 million in 1996.

With new digital imaging printers, copiers, cameras, software, and film, other industries were making the move into digital. Throughout much of 1996 and 1997, the photocopier industry was also beginning to incorporate digital technology. Some copiers used digital scanners with conventional toners. Most companies had designed digital lenses and optics into standard copiers, making them more efficient and higher quality, using less toner and sometimes appearing even sharper than the original document. Xerox developed a high-end copier that mixed digital sensors with standard printing. It could print up to 135 copies per minute. The photocopying industry experienced record sales in 1996. Copier sales increased 31 percent at Canon, Inc., and 57 percent at Oce-Van der Grinten. After years in second or third place, Xerox became the leader in this segment.

Advanced Photo Systems. In 1996, five companies that had been working together on a new film format released the Advanced Photo System (APS). Kodak, Fujifilm, Canon, Nikon Corp., and Minolta Corp. spent billions of dollars in research, with $500 million contributed by Kodak alone. These companies had interviewed more than 22,000 people in 11 countries. Customers had been given a camera-size wooden block and told to place features where they thought they would be easiest and most efficient to operate, with fewer mistakes.

The goal was to develop a new format that would be easier to operate, create better pictures, and use some of the new digital technology to augment standard film formats instead of competing with them. The traditional silver-based emulsion technology was combined with digital input and output devices to create the APS film and cameras. A durable, higher resolution emulsion was developed with a magnetic covering. The camera could read information from this magnetic strip on the film, and the film could also interact with the camera, sharing and storing information in a constant dialogue.

The new film had a stronger emulsion to withstand the tight winding as it moved in and out of the compact canister in which it was stored. The size of APS film was 24 mm, smaller than the 35-mm film that had previously dominated the industry. Despite its size, the new film had a higher resolution, with only one half to one third the grain size of standard 35-mm film. Even with the added magnetic strip, the emulsion was flatter, allowing longer strips of film to be stored in a smaller area. It was also more durable, making it less susceptible to everyday damage.

In addition, the APS camera could take pictures in three sizes. Once exposed, the film stored information such as camera settings, format, time, date, exposure number, and even personal information provided by the consumer, such as a title or names to be printed on the back of the photograph. With new APS lab equipment, photofinishers used the information on the film to make the best possible print. For example, if the subject was washed out and the background was too dark, the printer could read the camera settings used in that picture and adjust printing to darken the subject and brighten the background.

In a follow-up survey of APS customers, 90 percent felt the new system was better, and 70 percent believed they would take better pictures. Companies saw amazing growth in 1996 as the new system began to take hold. During December, when 30 percent of camera buying occurs, APS cameras accounted for as much as 60 percent of non-SLR cameras sold and 30 percent of all cameras sold. More than 5 percent of the more than two billion rolls of film sold in 1996 were APS. Kodak's goal was for APS to account for 20 percent of all film sales and 80 percent of all camera sales by the year 2000. That goal had almost been reached by 1997.

Kodak's overall sales jumped 5 percent by the end of 1996, despite the loss of Office Imaging, a division that manufactured and marketed photocopiers, which was sold during 1996. The company's sales for the fourth quarter alone jumped from $275 million in 1995 to $395 million in 1996, including the loss from the Office Imaging division, which was 13 percent of sales. Fujifilm's sales also surged from $5.4 billion in 1995 to $10.2 billion in 1996. The company's fourth quarter sales more than doubled between 1995 and 1996.

Approximately 800 companies were involved in manufacturing photographic equipment and supplies in the United States in the mid-1990s. These companies together recorded an estimated $24.4 billion in shipments for products included in the classification. The aggregate value of shipments predominantly derived from the industry's six primary product groups: sensitized photographic film, paper, and plates; photocopy equipment; prepared photographic chemicals; still picture equipment; microfilming equipment; and motion picture equipment. Of the various products, still picture equipment had the highest share of the market in 1995 with 43.9 percent of sales, and sensitized photographic film accounted for 24.3 percent of sales. Photocopy equipment accounted for 23.2 percent of industry sales, and prepared photographic chemicals, microfilming equipment, and motion picture equipment together totaled 8.6 percent of industry sales.

The Census Bureau estimated that in 1997 there were 62 establishments whose main product was still picture photographic equipment. These facilities shipped $2.5 billion worth of merchandise, spent $1.7 billion on materials, invested $187 million in capital expenditures, and employed 11,931 people. There were 23 establishments that made primarily motion picture equipment; 13 that made primarily photocopying equipment; and 13 that made primarily microfilming, blue-printing, and white-printing equipment.

Among shipments of photographic and photocopying equipment in 1997, still picture photographic equipment accounted for about 15 percent. The largest value of shipments in this segment originated in New York and Massachusetts. Microfilming, blueprinting, and white-printing equipment accounted for 2 percent. The largest value of shipments in this segment originated in Wisconsin.

There were 25 establishments whose primary products were silver-halide sensitized film, plates, paper, and cloth (except for X-rays). These facilities shipped $9 billion worth of merchandise, spent $3.6 billion on materials, invested $410 million on capital expenditures, and employed 28,727 people. There were 46 establishments whose primary products were sensitized photographic film, plates, paper, and cloth (other than silver-halide but including products for X-rays). These facilities shipped $2.4 billion worth of merchandise and employed 5,958 people. There were 45 establishments whose primary product was prepared photographic chemicals. They shipped $1.3 billion worth of merchandise and employed 3,097 people.

Silver-halide sensitized film, plates, paper, and cloth (except X-ray) accounted for about 57 percent of this category's shipments in 1997. The largest value of shipments in this segment originated in Missouri. Sensitized film, plates, paper, and cloth (other than silver-halide but including products for X-rays) accounted for 24 percent. The largest value of shipments in this segment originated in South Carolina and New York. Prepared photographic chemicals accounted for 17 percent. The largest value of shipments in this segment originated in New York and California.

In the late 1990s, manufacturers introduced new digital cameras and related products to meet continuing demand as consumers sent electronic images to their acquaintances via e-mail, posted them on their World Wide Web sites, used computers to incorporate them into business brochures and mailings, and designed them into multimedia presentations. The new technology allowed consumers to see their photographs immediately instead of waiting for slides or prints to be developed at a lab. Compared to the cost of developing traditional film and prints, the new type of photograph was more affordable. The images could be manipulated and improved with ease, and they could be used conveniently in desktop publishing. Some cameras were small enough to fit into a person's pocket. Others allowed the user to merge two images into one panoramic picture. Cameras with LCD panels allowed the consumer to view photographs immediately and eliminate those they did not want. Many models featured interchangeable memory cards, similar to solid-state disk drives, which could store information about the photographs. By early 1998 zoom lenses were being sold for a few digital cameras, a great advantage because this could provide better image resolution, but these products were still not common.

To complement their digital cameras, manufacturers also offered new products such as sophisticated photo printers that could transfer images to media such as glossy paper, postcards, labels, and stickers. Some were ink-jet printers, and others used dye sublimation technology involving print ribbons. Some models could also operate as scanners, converting printed photographs into digital images. These products were often priced affordably. In 1999 the Kodak Personal Picture Maker PM 1000 by Lexmark cost $150 after the consumer was sent a rebate, and the Canon BJC-8200 Color Bubble Jet Photo Printer cost $400.

Current Conditions

In 2000, manufacturers of photographic and photocopying equipment shipped approximately $9.1 billion worth of goods, up from about $8.3 billion goods the previous year.

All the news driving this sector in the new millennium can be summed up in one word: digital. This was the decade of digital, with digital cameras getting ever cheaper, smaller, simpler, and more powerful. In 1999, there were 2.2 million digital cameras sold compared to 17.8 million conventional cameras sold. Those numbers had drastically changed in the early 2000s, with approximately 9.4 million digital cameras sold in 2002, compared to 14.2 million conventional cameras. Digital's growing popularity was due to a number of factors, including the option of previewing or erasing photos, superior image quality, and the ability to download photos directly to a computer for e-mailing or storing to an online album.

In 2002, several quality digital cameras could be purchased for less than $400 and be as small as a credit card, and nearly as thin. With more attractive packaging, digital cameras were no longer just for techno wizards but began blossoming into chic and trendy accessories. Digital camcorders were also keeping pace with exciting new developments. With basic features like autofocus, autoexposure, and image stabilization, digital camcorders also offered the distinct advantage over its analog counterparts of image transfer to a computer without any loss of quality. Average prices were in the $1,000 to $2,000 range for a lightweight, quality unit. As digital cameras and camcorders became more like complex computers, however, some models may be limited to the technologically advanced.

Cinemas were also converting to digital, with the number of digital screens used worldwide jumping from 12 in 1999 to 155 in 2002.

For traditional filmmakers such as Eastman Kodak, the excitement over digital meant bad news, with the company's film sales dropping 5 percent alone in the fourth quarter of 2002 after an already weak year. Cost cutting forced Kodak to announce it would have to eliminate up to 2,200 jobs or 3 percent of its workforce. Although many digital coverts were also still using traditional 35-mm film, Advanced Photo Systems (APS) or one-time use cameras, APS has failed to decrease the public's overwhelming interest in digital cameras. Customers also did not like the higher prices charged for APS and failed to see any significant benefits. In 2002, sales of conventional film in U.S. supermarkets, drug and discount stores (excluding Wal-Mart) totaled $745.6 million, a decrease of 11.5 percent from the previous year. Predictions for 2003 for the company were not much brighter.

One-time-use cameras also continued to be popular in the new millennium. In 1997, one-time-use cameras held a 9.9 percent share of rolls, edging up to 12.8 percent by 1999. In 2000, that market grew to 15.0 percent. By 2002, one-time cameras held a more than 17.5 percent share. One-time digital cameras also came onto the market in 2003.

Meanwhile, advancing technology allowed photo-quality printers to continue to get better and less expensive. Many good quality printers could be had in 2002 for less than $150, with one, the Epson Stylus Photo 820, delivering quality prints for $99. With an estimated 80 percent of digital camera users printing their digital images at home, that meant good news for printer manufacturers. Multifunction printers (MFPs), which enable users to copy, scan, fax, and print, also continued their momentum. Digital copiers were forecast to grow 5 percent a year through 2006, while printers were expected to grow by about 0.5 percent per year through 2006.

Industry Leaders

Eastman Kodak Co., based in Rochester, New York, was the leading maker of film but was increasingly developing digital imaging media and other products for both amateur and professional photographers. The company reported sales of $12.8 billion in 2002, down 3 percent from 2001. Minolta Corp. Business Products Group (a subsidiary of Minolta Camera Company Ltd. based in Ramsey, New Jersey) had 500 employees and estimated sales of $3.3 billion. Its products included photocopy and facsimile machines, micrographic equipment, and color graphic and imaging systems. Polaroid Corp. had 9,274 employees and sales of $1.8 billion.

Several firms based in Japan were among the leading companies that marketed photographic equipment and supplies in the United States. These included Canon Inc. and Fuji Photo Film Company Ltd., based in Tokyo. Fuji had 72,567 employees and sales of more than $18 billion in 2002. During the late 1990s, Fuji Photo Film became one of the leaders in the U.S. photographic film market and was virtually tied with Kodak in the global market.

Incorporated in 1889, Kodak had led the industry throughout much of the twentieth century; however, the industry giant struggled with the growing popularity of electronic imaging, restructuring its organization on four separate occasions in the 1980s and early 1990s. Entering the electronic imaging market in 1992, Kodak unveiled its Photo CD system, which enabled purchasers to transfer images captured on conventional film to a digital disk for display on a television screen or computer. Kodak offered 20 new products in early 1993, the largest number introduced at one time in the company's history. The products were designed and marketed primarily for children and elderly people, with the hope of expanding what Kodak perceived as a saturated market in the 25- to 40- year-old age group.

Photocopiers were consistent losers for Kodak in the late 1980s and early 1990s, a situation that was exacerbated as the company fell behind its competition technologically. A pressing concern for Kodak was the successful development of a digital color copier that would enable the company to respond to the significant trend in that direction. During the last quarter of 1996, Kodak sold its Office Imaging division, because it was constantly trailing in the photocopying industry. Despite these problems, Kodak maintained a considerable lead over its competitors, controlling 70 percent of the market for film and photographic paper in both the United States and worldwide in 1995.

Polaroid Corporation was one of the leading companies of instant film and cameras; digital cameras; conventional film; and related products. In 2001, the company filed for voluntary bankruptcy and is now a new, privately held company with One Equity Partners owning most of its assets, including its trademark name. One Equity owns about 65 percent of Polaroid, and PDC, Inc. (the former Polaroid Corporation) owns the remaining 35 percent.

By 2003, Polaroid's I-Zone instant camera, which produces thumbnail-size images, was the number-one selling camera in the United States. The company also announced the launch of the new Polaroid One instant camera in 2003, which was an update of the 20-year-old classic Polaroid One. The new Polaroid One promised to be more compact, portable and stylish.

Polaroid Corporation was the world's leading manufacturer of instant cameras and film during the 1990s. The company was established in 1923 by Edwin H. Land, who left college after beginning the research that eventually led to the development of the first synthetic light polarizing material. Polaroid experienced its first considerable growth spurt during World War II, when sales skyrocketed from $1 million in 1941 to $15 million in 1945. Because this exponential leap in sales was primarily attributable to the company's work for the military, which used Land's discovery for various purposes, sales returned to their prewar levels afterward, falling to $1.5 million in 1947. In that same year Land introduced his first instant picture camera and sales ballooned once again.

After enjoying considerable success with subsequent instant developing film and camera models, Polaroid's revenues declined in the early 1970s due to unexpectedly low demand for its SX-70 camera. The company's sales were revived in 1975 with the introduction of its inexpensive Pronto camera. Six million units were sold in the first year. After rival Kodak introduced an array of instant cameras that year, Polaroid filed a patent infringement lawsuit, touching off a hotly contested and long drawn out legal battle.

Polaroid's sales plummeted once again during the 1980s, and the company streamlined its operations to invigorate profits and forestall a hostile takeover attempt by Shamrock Holdings. The company's Spectra camera and film, introduced in 1986, provided a much-needed boost to revenues and brightened what was generally a disappointing decade of performance. The company began manufacturing conventional film for the first time in 1989, and two years later it finally received $873 million from the patent infringement lawsuit it had filed against Kodak 16 years earlier.

Workforce

The Census Bureau estimated that, in 2000, there were 19,672 people engaged in manufacturing photographic and photocopying equipment, including 11,068 production workers who earned an average hourly wage of $17.26.

America and the World

Exports in the photographic and photocopying equipment market have declined over the past five years. Some $2.4 billion worth of shipments were exported in 1997, falling to just over $2 billion in 2001, a decline of $406 million over the five-year period. Imports declined sharply over the same five-year period. Imports were valued at $6.3 billion in 1997 and ended 2001 with just over $3.5 billion, a decline of approximately $2.9 billion.

Historically, foreign manufacturers of photographic equipment and supplies have enjoyed considerable success competing in the U.S. market. This tradition continued in the early 1990s, as a global recession exacerbated the competition for flagging consumer spending and retarded the sale of U.S. products overseas. Exports of domestic photographic products were flat in 1992 at an estimated $3.8 billion, after a 10 percent increase in 1991. In 1993, after slumping for so long, exports began to rise again to $4.6 billion in 1995, a 12 percent growth between 1994 and 1995. The rise was partially attributable to Japan's own economic slump, which decreased the competition. During the first six months of 1996, exports increased 10 percent over the same period of 1995 to $2.3 billion. Sensitized film, paper, and plates accounted for 47 percent of the export total and had the fastest growth rate at 17 percent. Photocopying equipment and photographic chemicals both increased about 8 percent. Still picture equipment increased by 2 percent. Motion picture equipment continued to decline, down 14 percent from 1995.

As exports continued to grow and imports continued to shrink, the trade balance had been narrowing. The hope was that the expected economic recovery of international markets, particularly in Europe, and reduced tariffs and trade barriers among European Community countries would ameliorate overseas sales—especially considering the low saturation level of photographic equipment in Eastern Europe and the European Community.

During the 1990s, the North American Free Trade Agreement (NAFTA) reduced tariffs on photographic products being marketed among Mexico, Canada, and the United States, an arrangement that promised to benefit photographic equipment and supplies manufacturers in the United States. By 1995 the United States was exporting about $555 million more in photographic products than it was importing from countries participating in NAFTA. (Exports totaled $1.14 billion that year, compared to $581 million in imports.) The trade balance had been improving overall, as consumers in the United States purchased fewer still-picture products made in other countries. For the first half of 1995 the trade deficit was $1.9 billion, but it declined to $1.7 billion for the same period of 1996.

Further Reading

Avery, Susan. "Double-Digit Cost Savings Possible With New MFPs." Purchasing , 15 August 2002.

Brown, Bruce, and Marge Brown. "Picture-Perfect Printers: Three New Photo Ink Jet Printers Vary in Features and Price, but All of Them Produce Great-Looking Prints." PC Magazine , 14 December 1999, 45.

"Capitalizing On Demand for Digital Images." Chain Drug Review , 17 February 2003.

Clark, Brian L. "Digital Cameras." Money , October 2002.

"D-Cinema Systems On Hold As Studios Set Standards." Variety , 3 February 2003.

"Digital Darkrooms." PC Magazine , 15 May 1998, 9.

"Digital Revolution." Incentive , February 2003.

"Dye-Sub Snapshot Printers." PC Magazine , 14 December 1999, 45.

Gair, Cristina. "Sneak Peeks." Home Office Computing , February 1999, 27.

Grossman, Lev. "Pretty as a Picture." Time , 7 October 2002.

Keenana, Faith. "Kodak: Not a Pretty Picture." Business Week , 3 February 2003.

"A Launching Pad for New Products." MMR , 24 February 2003.

Manes, Stephen. "Shooting Stars." Forbes , 9 December 2002.

Masters, Greg. "Not A Clear Picture." Retail Merchandiser , February 2002.

Menendez, Arthur. "High Tech and the Internet." SwissWORLD , April-May 1999, 33.

"Move To Digital Continues." Research Alert , 2 May 2003.

"New Polaroid One Delivers Spontaneous Moments Instantly." PR Newswire , 6 May 2003.

"Polaroid's Instant Response." Photo Marketing , February 2003.

"Popularity of One-Time-Use Cameras Continues to Grow." Research Alert , 4 October 2002.

Smith, Geoffrey. "This Market Just Isn't Developing." Business Week , 13 May 2002.

Song, Sora. "Snapping Up a Printer." Time , 16 September 2002.

U.S. Census Bureau. 1997 Economic Census. Washington, DC: GPO, 1999. Available from http://www.census.gov .

——. Annual Survey of Manufactures , Washington, DC: GPO, 11 February 2002. Available from http://www.census.gov .

U.S. International Trade Commission. U.S. Total Exports, 1997-2001 , May 2003. Available from http://www.ita.doc.gov .

——. U.S. Total Imports, 1997-2001 , May 2003. Available from http://www.ita.doc.gov .



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