The boom in digital photography triggered a series of aftershocks at Eastman Kodak Co. as one after another of its aged factories was dynamited.
Since 2004, the world's biggest film manufacturer has eliminated 27,000-plus jobs, cast off major operations and invested billions to gain a firm foothold in the highly competitive arena of electronic imaging. It now offers an alluring patchwork to help people harness their photo collections: a 70-million-member online service, 80,000 retail kiosks and an array of digital cameras, printers and other devices.
The most perilous turnaround in Kodak's 127-year history is officially over.
But questions about the photography pioneer's prospects are intensifying: Will it adapt and flourish, propelled by a rich portfolio of patents? Is it destined for a breakup? Might it even join forces a few years from now with Xerox Corp., its historic cross-town rival?
"Their strategy makes sense, they're doing the right things ... but the competitive reality they face is extremely daunting and will only grow more challenging over time," said Citigroup analyst Matthew Troy.
CEO Antonio Perez, who ran Hewlett-Packard Co.'s digital printing operations before succeeding Dan Carp at Kodak's helm in June 2005, "is doing an excellent job," Troy said. "It's just that, with what he has, I don't know if anyone can do that job."
Kodak's payroll, which peaked at 145,300 in 1988, has shriveled to about 30,000, a level not skimmed since the Great Depression.
Despite a 30 percent slide in U.S. sales of consumer film in recent years, Kodak can rely on its longtime cash cow - and especially its motion-picture film unit - to ease its bumpy ride.
While digital businesses account for more than 60 percent of Kodak's revenue and are growing rapidly, they net only modest profits.
Ulysses Yannas, a broker with Buckman, Buckman & Reid, thinks Kodak has the technology, management, distribution and iconic brand name to support success.
"They'll never get the margins they used to get out of film, but the sales gains they can get out of digital, especially in commercial printing, are unbelievable," he said.
As high-profit film fades, Kodak's survival will hinge on how well it prevails against entrenched, digital-consumer-savvy rivals such as Sony, Canon and Hewlett-Packard.
Kodak's answer has been to outsource camera manufacturing and leverage its imaging know-how and intellectual property via licensing deals.