The value of Eastman Kodak Company’s 1,100 patents for digital imaging is estimated to be $3 billion, which could represent as much as five times the value of the entire business. Companies like Google, Microsoft and Samsung that are scrambling to secure valuable intellectual property rights are reportedly interested in buying the former photography giant. The incentive is that Kodak’s technology patents are used in 85 percent of smart phones and digital cameras.
Before camera phones became consumers’ preference, Kodak was worth $30 billion. Today, the company’s equity has dropped to below $600 million. Company officials announced last month that they would seek “strategic alternatives” for Kodak’s patents.
The photography company’s $3 billion patent estimate was predicted by MDB Capital Group based on Google’s recent purchase of Motorola Mobility. The expensive move netted 17,000 patents for Google a move the company hopes will make it more competitive with Apple Inc.
Kodak’s plummet in the market is blamed on the company’s failure to keep pace with competitors. Kodak’s photography dominance in the late 1990s slipped away to Canon and Nikon and later to camera phone manufacturers. Some financial analysts think that a new Kodak owner would dismantle the company’s current business operations. It is believed a buyer could sell off Kodak’s printing and digital camera businesses.
The photography company, believed to be headed toward default, is embroiled in a patent dispute against Apple and Research in Motion. Kodak alleges the companies are infringing on its image-preview technology.
The U.S. International Trade Commission is expected to decide the fate of the intellectual property lawsuit by the end of the month.
Source: Bloomberg, “Kodak Worth More in Breakup With $3 Billion Patents: Real M&A,” Danielle Kucera and Rita Nazareth, Aug. 17, 2011