Feng Yu asked Kameda Masao to visit that camera company to buy their digital camera technologies. Oh, this camera company is Kodak!
Kameda Masao promised Feng Yu that he will buy the technologies at the lowest price as soon as possible.
Feng Yu has asked Kameda Masao and not Ralph is because Kameda Masao is Japanese, and he will be representing a Japanese company to buy the technologies. Japan’s digital camera technologies are the most advanced in the world, and Kameda Masao can use this excuse to bargain and not let Kodak get suspicious.
Kodak had not placed much focus on the digital camera as they are afraid the rise of digital cameras will affect their core business of film development. This is also why Kodak had been suppressing the development of the digital camera industry’s development.
Although Kodak’s digital imaging technologies are one of the most advanced in the world, their digital imaging related profit is only slightly more than 15%. Their investment in digital imaging technologies and traditional film technologies are almost the same!
Many shareholders are unhappy with Kodak’s CEO and felt his decision to develop digital cameras had lowered the company’s profit. If the company concentrates on traditional film companies, their profits will increase by another 30%!
Kodak’s shareholders welcome Kameda Masao’s visit, and many shareholders felt the company should sell all their digital imaging-related patents and businesses as selling only the patents will let people think that Kodak is facing cash flow issues.
But some shareholders felt selling the patent technologies is enough. After all, their developers can continue to develop new technologies for sales or authorization. This will be another source of income for the company.
After selling these technologies, Kodak will be making money from their digital operations. Since this division can make money, we should continue in this direction. If the company can develop more advanced technologies, their company will not lose out to their competitors.
A few shareholders opposed to the sales of their technologies and patents. The company had invested many resources and had just set its strategy to focus on both digital and traditional camera technologies. They need at least three years to see the result.
Digital camera technology has been improving rapidly in the past few years. In a few more years, digital cameras will be good enough to challenge traditional cameras.
But all shareholders felt digital cameras will not replace traditional film cameras anytime soon!
Kameda Masao asked Feng Yu if Kodak is selling their digital image operations, should he accept it? The cost of acquiring Kodak’s digital image will be higher than buying their patents.
Kodak owns the most digital camera technology patents. This is a company with more than 100 years of history, and its brand is worth an astronomical value.
Without the Kodak brand, the digital camera business value will be lower. Simply put it. If a camera is printed with a Kodak logo, it will be worth at least 200 USD more than the same camera with an unknown brand! Kodak’s brand can add value to a camera.
This is also the reason why Kodak’s digital cameras are not selling well. Samsung, Sony, Nikon are also big brands, but they are selling their products at lower prices.
Furthermore, other companies had been promoting their digital cameras, and only Kodak is still promoting their traditional cameras. This is because they have film processing shops all over the world, and this is the company’s main revenue source.
Kodak film sales are also the world’s number one.
Feng Yu thought for a while. It’s not a bad idea to acquire Kodak’s digital imaging business, but it will depend on the price. If the price is low, he will acquire it to develop his own cameras. At least he will not suffer any losses with the Chinese market.
If it is expensive, then forget it. It is not worth competing with overseas brands as a digital camera will only last for about ten years. Ten years later, the smartphone will be the trend, and there will be all sorts of photography APPs that are more fun than digital cameras.
Only professional and enthusiastic photographers will continue to use digital cameras. But how many professional and enthusiastic photographers can there be?
If digital cameras can be developed into digital video cameras, the prospect will be better. But digital video camera technologies are different from the digital camera, and Kodak does not have it.
Traditional video cameras will be obsolete in 6 to 7 years, and movies will be filmed using digital video cameras. Digital video cameras are lighter, have higher storage, can be edited using software, and is much cheaper than using films.
Digital videos only require some storage space, and this can save lots of production costs. The small size camcorders will become very popular with people to record their own videos for leisure.
The digital camera’s trend is also because of the development of PCs. Many people like to take pictures but are unwilling to spend money to develop films.
But with digital photos, people can delete the pictures they don’t like and print only a few better pictures.
But when Kameda Masao told Feng Yu about Kodak’s asking price, Feng Yu is dumbstruck.
“What did you say?! They are asking 4.6 billion USD for their digital camera business?!”
This amount had exceeded Feng Yu’s budget by more than ten times!
Feng Yu’s budget is 500 million USD for advanced digital imaging and camera technologies and patents. If possible, he will only buy the technologies and patents he needs.
“Boss, their technologies are very advance and owns many exclusive patents. I am confident that we can buy out their digital imaging business within 4 billion USD.”
Kameda Masao knew Feng Yu can afford 4 billion USD, and Feng Yu had been willing to spend on the industries he targeted.
“No! It is too expensive! You just pick some imaging and electronics technologies will do. As for the rest of their technologies, we can just buy the authorization or develop ourselves.”
Feng Yu only wants to integrate digital cameras into his mobile phone. 4 billion USD is a huge investment, and Feng Yu still need funds to acquire AMD’s shares.
Kameda Masao realized he had misunderstood Feng Yu, and quickly say. “Boss, don’t worry. If we are only buying a few technologies and patents, or getting the authorization, it will not even cost 500 million USD. I can even get them to sign an agreement to let us have the priority to buy any new technologies they developed in the future.”
“Ok. Just go and negotiate with them based on what you said. Try your best to lower the prices.”
After hanging up, Feng Yu shook his head. Even as a super tycoon, he still does not have enough to spend!
Kodak
