DIGITAL DIVIDE

When film ruled home photography, women took about two-thirds of all pictures and ordered most of the prints, according to industry statistics. But things changed when digital cameras began horning in on film’s turf: Suddenly men got behind the camera — and many of the shots ended up trapped inside a computer. It was a disaster for Eastman Kodak Co. Sales of film and paper, its biggest sources of profit, tumbled. The 116-year-old company’s long-successful strategy of courting women, emphasizing not so much gee-whiz technology as the chance to capture “Kodak moments,” was in deep trouble.

Today, Kodak is clawing its way to the top of the digital world by bringing its best customers into that world with it. Starting four years ago, Kodak set out to make digital photography female-friendly. The company’s research showed that women wanted digital photography to be simple, and they desired high-quality prints to share with family and friends.

Kodak revamped its digital cameras, stressing simple controls and larger display screens. It invented a new product category, the compact, stand-alone photo printer, which could be used to easily make prints without a computer. And it pushed to make digital-image printing simpler through retail kiosks and an online service.

The result has been a slow but steady turnaround in Kodak’s fortunes in the digital arena. The company is now the No. 1 seller of digital cameras in the U.S., up from a distant No. 3 as recently as 2002, according to market researcher IDC Corp. Although rivals have followed, Kodak remains tops in stand-alone photo printers. Kodak’s photo paper for inkjet printers, introduced just last year, is the No. 2 brand after Hewlett-Packard Co.

And evidence is growing that women are returning to retail stores to do their printing. There, Kodak gets its slice via a formidable network of digital print-making machines. In the 12 months ended March 31, digital prints made in stores rose to 35 percent of the market from 21 percent and prints made at home fell to 50 percent from 70 percent, according to the Photo Marketing Association, a trade group.

Kodak isn’t arguing that women lack the aptitude to deal with digital photography. In survey after survey, women simply say they aren’t that interested in fiddling with cables and complicated camera-computer interfaces. So Kodak has worked to keep things simple, while most rival camera-makers focused on developing high-tech features and marketing them to techies.

“Men are from Canon, Women are from Kodak,” was the title of a recent report by Lyra Research, a Newton, Mass., firm that follows the industry. The report noted that Kodak is No. 1 among female digital-camera users with a 20 percent share, but it is No. 4 among men with just 11 percent. Kodak’s approach is “right on the money,” says Charles LeCompte, president of Lyra. He says that Kodak has always known most pictures are taken by women “and they’ve done a great job targeting that market.”

In an interview, Chairman Daniel Carp says “women have just as much aptitude and ability,” as men to use digital products, but they don’t want to spend time making them work. “Throughout history,” he adds, “women have been the keepers of family memories.”

Kodak’s turnaround in digital has been masked, to some extent, by the rapid decline of the company’s traditional, film-photography business. Over the past four years, Kodak’s revenue has fallen 3.4 percent and earnings have dropped 60 percent as it has scrambled to adapt to the digital world. It has laid off nearly 12,000 workers and its debt has been downgraded to junk. And Mr. Carp, who as chief executive set the company on its digital course, has just taken early retirement, although he remains chairman for the rest of the year.

Photography accounted for 68 percent of Kodak’s $13.5 billion in revenue last year, and investors still question whether the digital-photo business will ever be as profitable as film had been. Many young people do their photo swapping via Web sites or cellphones, rarely bothering to print out their images.

The company has outlined a plan to gradually close down film operations, while quickly building up digital sales in medical imaging and commercial printing as well as consumer digital lines. Kodak says revenue from digital products will top film revenue for the first time this year. But the transition has been bumpy. In April, it surprised investors by reporting a loss for the first quarter, and its stock fell 14 percent in the next few days, approaching its 2004 lows.

Kodak, based in Rochester, N.Y., is now competing with consumer-electronics specialists like H-P and Sony Corp., which are used to rapid product cycles and unrelenting price cuts.

Still, Kodak says that its success with women shows that its strategy is on track. Brendan Burnett-Stohner, a New York-based management recruiter, bought a Kodak digital camera and snapshot-printer after her granddaughter was born two years ago. “I print in bulk and send them to my mother, my mother-in-law and daughter. Sometimes I make photo albums,” Burnett says. “I don’t think my husband has ever printed a picture.”

CVS Corp. has bought thousands of Kodak digital-printing kiosks in a bet that its customers — 80 percent of whom are women — will buy digital prints the way they bought film prints, at retail stores. “Kodak shares our vision that the female customer is important,” says Grant Pill, director of photography at CVS. “Kodak has built a very user-friendly product and positioned it that way.”

Kodak executives say they knew that digital imaging would one day supplant film photography, but the company had assumed that the transition would take much longer than it has. In its regular customer research starting about 2000, the company found that men had taken control in many digital-camera households.

Susan Stoev, Kodak’s world-wide director of consumer insights, says women complained that their husbands didn’t bother to print pictures, preferring to view them on their computer screens instead. Men “took the picture and put it in the computer. But then it was like a roach motel for pictures. They never got out,” says Ms. Stoev. The Photo Marketing Association says men print 25 percent of their digital images, while women print 35 percent. Although two-thirds of all film images were taken by women, by 2001 women were buying just 35 percent of digital cameras.

But women still wanted snapshots that they could hold, pass around and stick on refrigerators, Kodak’s researchers found. “It’s an extremely important part of the culture,” says Stoev. “People run into burning buildings to save their pictures.” In the past, Kodak says, 35 percent of all prints were given to others, and its research shows that 80 percent of the people who make a habit of giving away photos are women.

In 2001, Kodak started designing products and services that would generate as many prints as possible. Not only were digital cameras on their way to becoming low-margin consumer-electronic products, but Kodak had long ago lost most of the camera market to the Japanese makers. Its strategy was aimed at boosting sales of paper and inks, high-margin items that consumers would have to constantly replenish.

To simplify the process of getting digital images from the camera to the PC, Kodak in 2001 introduced a docking station that could remain attached to the computer. It was the first such station that both recharged camera batteries and downloaded pictures to the computer at the touch of a button. Since then, most other digital-camera makers have followed suit.

Jeannette Izzi, a 35-year-old mother of three in Washington Township, Mich., says “with the dock, it’s like having ‘one-hour photo’ in my house.” When her daughters’ friends come over to play dress-up, Izzi sends them home with a snapshot. The prints cost about 60 cents apiece, more than twice the price at the drugstore. But Ms. Izzi says she’s saving money compared with the pre-digital days, because she can look on the camera screen and tell if the pictures are good before printing.