The Big Push-The Bigger Divide

• Author: Ronald K. Fierstein
• Profession: Lawyer on the team of litigators from the prestigious patent law firm of Fish & Neave
• Pages: 121-145

121

CHAPTER 7

THE BIG PUSH—

THE BIGGER DIVIDE

With progress seemingly being made on both the camera and the film

fronts, Land decided in early 1968 that the time had come to bring Kodak

into the picture. The object was to secure a commitment from its business

partner of two decades to manufacture the negative for Polaroid’s new film,

as Kodak had done for every previous Polaroid one-step product. In the pre-

ceding months, during the regular meetings held with Kodak to monitor the

continuing supply agreement for Polacolor negatives, there had been some

hints of a new project on the horizon at Polaroid.1 But now Land was ready

to put Polaroid’s new integral film firmly into the forefront of the conversa-

tion. Land invited Kodak’s Wren Gabel, by then an executive vice president

and member of Kodak’s board of directors and executive committee, and

George Petersen, the in-house attorney who had risen to associate director

of Kodak’s patent department, to visit on February 9.

Polaroid’s objective was clear. Although McCune had started the pro-

cess of putting Polaroid into the position of being able to manufacture

its own negatives at some point, thus getting the company out from its

almost total reliance on Kodak, it remained a long-term objective. Land

and his colleagues were not confident that a Polaroid plant could be ready

to produce sufficient quantities of negative to enable an introduction of

the new absolute one-step photography system in the time frame it was

looking at—namely, 1971 or 1972 at the very latest. Accordingly, Pola-

roid needed to secure Kodak’s commitment to bridge the transition.

At the meeting, Land remained extremely secretive. He told his Kodak

colleagues only that Polaroid had developed a “new process,” which for

purposes of their discussions was code-named P-110.2 The two existing

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A Triumph of Genius

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Polaroid color films that Kodak had worked on were known in intercom-

pany parlance as P-108 (roll film for in-camera processing) and P-109 (pack

film for out-of-camera processing). The new P-110 process, Land advised,

was going to require an “improved color negative,” and Polaroid wanted

Kodak to embark on another developmental program in order to supply that

material to Polaroid. Land disclosed nothing else about the nature of the

film, the camera, or the overall system Polaroid was working on.

As Land and the other Polaroid executives might have suspected, it

was a very different Kodak, at least in its attitude toward Polaroid, which

they were approaching for help. For a variety of reasons, the attitude at

Kodak was no longer that of the paternalistic mentor anxious to help

ambitious little Polaroid with its curiosity of a photographic system. The

incredible success that Polaroid was experiencing in the market clearly had

caught Kodak’s attention. In 1968, Polaroid was in the midst of a decade

that would see its sales grow from $129 million in the year Polacolor was

introduced to $571 million. This growth was attributable not just to Pola-

color. As predicted by industry analysts, Polaroid’s introduction of the

low-cost Swinger camera line had spurred sales immensely, even though

at first the system took only black-and-white photographs. Polaroid had

introduced the first Swinger model in 1965 at a retail price of around four-

teen dollars, squarely in the heart of Kodak’s mass-market domain. Seven

million Swingers were sold in the first three years, driving Polaroid’s sales

and profits to new heights, and continuing to change Kodak’s executives’

perception of Polaroid and its market segment growth potential.3

During this period, Kodak also enjoyed success with its own innova-

tion in amateur photography. The Instamatic was Kodak’s first system in

which the film was contained in a cartridge that could simply be dropped

into the camera. No more threading, no more loading film in the dark. The

basic Instamatic model sold for around twenty dollars, and Kodak sold

nearly fifty million units around the world in the first few years after its

introduction in 1963, just months after Polaroid had introduced Polacolor

film. The Kodak Instamatic was a product so successful that Fortune

suggested that one had to “look back to Singer’s foot-powered sewing

machine or Hoover’s vacuum cleaner for a comparable example.”4

Yet, the unparalleled success of the Instamatic and Kodak’s appar-

ently unassailable market dominance did not stop it from casting a wary

eye on Polaroid’s continuing progress. While Kodak may have viewed

Polaroid’s early instant system as “a toy of limited commercial appeal,”5

its reassessment of Polaroid was highlighted in a Fortune feature detail-

ing the history of the two companies:

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