Life Magazine, October 27, 1972 {George Holderied}

Nearly all aspects found in Polaroid during the companies prime in the 70s and 80s have found a new home in today’s Apple Inc. It’s all there – from simple but effective graphic design to a high level of functionality to financial success to an upbeat attitude. Polaroid Corporation was founded on Edwin H. Land’s belief that consumer markets should be created around inventions generated by scientific research. The company dominated the photography market for a period in the 1970s with the advent of east-to-use instant film. The company witnessed a revival in sales a decade later when Chairman McCune and I. MacAllister Booth (who had become president in 1983 and CEO in 1985) pruned Polaroid staff and reorganized the company into three divisions: consumer photography, industrial photography, and magnetic media. The first success reaped from this new marketing strategy was the Spectra, introduced in 1986. The upscale Spectra came out of market research indicating that instant camera users wanted better picture quality.

Before one can examine the Spectra, however, it is important to examine the factors conducive to Polaroid’s success – namely, why photography was so popular? In 1972, both Life and Time magazines published stories on the new relatively small Polaroid camera, the SX-70. Fortunately, the Time article, “Polaroid’s Big Gamble on Small Cameras”, is archived online. After reading this lengthy (12 pages) article, the similarities between Polaroid and Apple become quite obvious. All quotes are from the article, which can be found here.

The public’s interest in photography can be compared to today’s on-the-go society demanding portable digital media devices. In 1972, it was believed that everyone would someday carry a camera wherever they went. The same is true today with iPods and iPhones.

Whether abroad or at home, Americans are in the midst of a photo binge, taking more and more amateur pictures of people, places and things.

The new popularity is transforming photography from mere hobby to a natural, even essential way of looking at the world and capturing life as it is. Photo galleries, many selling the work of professionals at $25 per print and up, have opened by the dozen in large cities. The craft has found some of its most devoted followers among the young, who increasingly strive to document their own new lifestyles and find photography, with its blending of technology and aesthetics, an honest way to do so. As a part of this view-finding process, photography has become one of the fastest growing subjects in education: photography courses are offered at some 700 universities, junior colleges and adult education centers. Tens of thousands of Viet Nam vets have become serious about photography after buying expensive 35-mm. cameras at big discounts in the Far East. At rock concerts and in youth hangouts from Central Park’s Bethesda Fountain to California’s Santa Monica beach, there are almost as many camera straps as headbands in evidence.

Some 42 million Americans, or about one in five, are photographers of one sort or another. Amateurs snap away at an astonishing rate, taking more than 5 billion pictures annually, or about 158 each second, night and day, all year long. Their purchases of film, cameras, flashbulbs and processing services are the backbone of a more than $4 billion-a-year industry. The Bureau of Labor Statistics estimates that photography will be the second-or thirdfastest growing industry in the economy during the 1970s, rising an average 8% or 9% a year.

The public’s interest in photography has always leaped highest whenever new cameras, making picture-taking even simpler and more reliable, have reached the market. This year, for the first time in nearly a decade, cameras and films for amateurs are undergoing a revolutionary change. The new American cameras are not only easy to operate but, more important, easy to carry. They are so compact, compared with their predecessors, that they can be toted in pocket or purse, more like a wallet or a pack of cigarettes than a piece of hand luggage. The era of pocket photography is here, and it promises to make the camera a spectacularly more usable possession. If leaders of the photo industry are right, many consumers will want to carry one around nearly everywhere, having it ready to employ as a kind of visual notepad.

Financially, Polaroid did very well during its glory days, much like Apple Inc.’s share value has soared since 1999, and especially after Q2 2004.

Since 1961, revenues have risen by 400%, to last year’s $504 million, making Polaroid one of the fastest growing companies of modern times. As a result, Polaroid stock is one of the favorite glamour issues on Wall Street. Anyone who invested $1,000 in the company in 1938 today has stock worth $3,575,000. Indeed, an investment of $1,000 in Polaroid ten years ago has grown to at least $4,750.

Polaroid’s product line demonstrated a gradual progression over the years, culminating in an advanced, yet cost-effective product – the SX-70. Apple did the same with its early iMacs and iBook and again with the early black and white iPod manifesting itself in color, mini, nano, and shuffle versions.

Sales spurted further ahead each time Land dangled a new improvement before customers, which he did with increasing regularity: black and white film in 1950, 15-sec. pictures and a camera with an automatic exposure system in 1960, color film and film cartridges in 1963, the low-priced Swinger in 1965, and most recently a pair of low-priced color cameras, the Colorpack II in 1969 and the Square Shooter in 1971.

Polaroid release events seemed uncannily like those of Apple. Who knows if Steve Jobs took a page out of Edwin Land’s book on this one.

Many of these models were previewed during Land’s now-legendary appearances at Polaroid’s annual meetings, at which he stages a modern magic-lantern show to demonstrate the company’s latest marvels. Several thousand people, including armies of securities analysts and newsmen, attend these affairs. To show off the SX-70 last April, Land set up a dozen displays—ranging from a simulated children’s birthday party to a collection of antique miniatures—at which Polaroid employees clicked away with the new cameras.

Polaroid did not feel intimidated by competition in the companies prime. Kodak was always a competitor in the photography industry, but never was a threat in the field of instant photography. As a result, Polaroid had no direct competition in the 1970s. This complacency would later contribute to the death of the company. Apple has competitors, for sure, but has come a long way in the personal computer market, and the iPod dominates other digital music players in terms of sales.

Even so, Kodak is painfully embarrassed at finding itself so far behind in instant photography. Convinced for years that Polaroid could never find a camera inexpensive enough to tap the mass market, Kodak’s chiefs were finally toppled from their complacency by the success of the Polaroid Swinger in the mid-’60s, and they ordered a hurry-up research project into an alternate system of instant photography. Land was no longer simply an ingenious inventor and customer; he was an enlarging and possibly troublesome competitor. Kodak executives were surprised by the high quality of the color prints produced by Land’s small new camera.

Kodak reports that it is pouring “very substantial funds” into instant photography. Land says that Kodak researchers still “don’t know where they’re going” with an instant process. Some stock analysts, however, believe that the company plans to market its own instant film process for use in Polaroid cameras as early as 1973. These experts are convinced that any camera buff—even a Polaroid owner—would automatically have faith in a new yellow-box product. Meanwhile, there is much speculation that Kodak and Polaroid are racing each other to introduce —some time in the next few years—instant slides and instant movie film.

Certainly Kodak is eager to make and market instant-photo cameras, but that will not be easy. Polaroid employs no fewer than 25 patent attorneys, who have erected a blockade of some 1,000 patents around the Polaroid process. Though rights to the original Land inventions in instant photography have long since expired, no would-be competitor has been able to jump ahead of those that are still tightly protected. Thus, to an astonishing degree, Polaroid has no direct competition.

Polaroid was more “green” than many companies of its day. The SX-70’s film developed as one unit – pieces didn’t need to be thrown away.

Polaroid technicians have gone to extreme lengths to protect the environment, once even rigging a costly twist in pipes leading from a chemical plant in order to save several trees. One of Land’s personal embarrassments—until the “garbage-free” SX-70 film was designed—was the amount of litter that his product created.

Land has built Polaroid very close to his own self-image—part scientist and part humanitarian philosopher. The latter side of the corporation’s personality is most strongly expressed in its extraordinarily forward-looking community-relations program, which has served as a model for other big corporations. Polaroid now donates money or some other form of assistance to 143 community projects in the Boston area, including day-care centers and tutoring projects. Says Cambridge Mayor Barbara Ackerman, a Democrat and social activist: “Polaroid is the only industry in this city that you can go to for money, for land or for some other contribution to the community. Polaroid considers itself a neighbor and actually does neighborly things.”

Polaroid is interested in the world far beyond its immediate neighborhood. The company’s community relations director, Robert Palmer, recently spent ten days helping mediate a prisoner revolt at Massachusetts’ Walpole state prison, and has condemned as dehumanizing a proposed ID card system for Massachusetts welfare recipients—even though an ID system pioneered by Polaroid might well have been used. This year the company reached a longtime goal of employing one black in each ten jobs, about the same ratio as blacks in the total population.

Two differences: Polaroid did not conduct market research, and Japan was just beginning to infiltrate the American market.

Perhaps the most remarkable thing about Polaroid is that it has grown huge by creating products for which there was little detectable demand, until Edwin Land thought of them. Each is, as Land says, sui generis—in a class by itself. That distinction makes conventional market research, in the words of one of his marketing executives, “a waste of time and money.” Polaroid did not spend a single dollar trying to discern in advance whether people would actually buy the SX-70.

Sales of the sophisticated Japanese cameras are clicking up fast in the U.S. and have wiped out practically all competition from German models. Still, the Japanese marketed only about 1,000,000 cameras in the U.S. last year, capturing under 10% of unit sales. Japanese manufacturers, in fact, refer to the U.S. as a “developing market.”

Now, for the branding. Both companies branded superior products with superior graphic design.

Polaroid design: 1958-1977 {Paul Giambarba}

The clear typeface in 1958 revitalized the company’s image and allowed Polaroid to better compete with the yellow boxes of Kodak. The black really stood out on television advertisting as well. Later packaging was much more colorful, yet still very simple and memorable. The SX-70’s popularity, however, could only last for so long. After a few years, the newness wore off, and Polaroid faced a midlife crisis. It would be almost a decade until the next innovation, Spectra, emerged.

In 1987, Fortune wrote an optimistic report on Polaroid titled, “How Polaroid Flashed Back“. Polaroid’s stock had jumped 55% since 1986, foreign markets were solid, and the company placed a new focus on quality, not just accessibility. Everything was about innovation, not price. Apple surely follows the same mantra today. At the time, Polaroid, along with other photography companies such as Canon, had already begun researching the next camera – the digital camera. Polaroid knew the success of its brand hinged upon the development of a suitable image sensor for instant digital photography. Sadly, the company failed in this endeavor. Still, the Fortune article was ahead of its time in the description of digital photography. In 1987, a million pixels was just a million pixels (as opposed to a ‘megapixel’).

The company is betting the most on the electronic still camera, the first new variety of instant photography. The company has developed components for it but doesn’t have a prototype yet. Managers, though, are enthusiastic and think electronic cameras could revolutionize photography in the 1990s. The first version — at least several years away — will be a high-price item, perhaps as much as $2,500, aimed at professionals and buffs who love to be the first to have the latest gadget. Says Booth: ”I think it will be five to ten years until an electronic camera hits the mass market, but we’re going at it like it might happen tomorrow.” The electronic camera will look like an ordinary 35mm model but will be entirely different inside. It uses a computer chip called an image sensor instead of film to record pictures. Light passes through a lens and hits the image sensor, which converts it into an electronic signal. Another chip called an image processor adjusts the picture for sharpness and color. The electronic information is then stored on a two-inch magnetic disk that can hold as many as 30 pictures. The disks will be much cheaper than film, just as videotape sells for a small fraction of what movie film costs. The shutterbug will be able to look at what he snapped on his television screen before making instant prints of his favorite shots. At least a dozen companies have prototypes of electronic cameras, and Canon put a model on sale last year, priced at a breathtaking $6,000. But the quality of the prints is still poor, and Polaroid thinks it can come up with a much better product using its instant-picture technology. ”I think instant film is going to be the dominant factor in electronic photography, and we know more about that than anyone in the world,” says Booth. A color photograph contains an astonishing number of dots called pixels, much like the ones that make up a pointillist painting. A fine-quality 35mm print has about 18 million pixels. One big problem with electronic cameras is that the image sensors used on today’s versions usually translate what they see into 400,000 or fewer pixels, nowhere near the quality of film. Even if they could match film, today’s electronic cameras use peripheral computer printers that cannot reproduce enough pixels to match the quality of even a newspaper photo. In its new $30-million microelectronics lab, Polaroid is developing an image sensor that it hopes will close the gap. The sensor may be able to translate light into one million pixels, which Polaroid’s engineers think may produce a good enough picture — about as good as today’s Spectra prints — to please consumers. The company is also betting that instant film, not a computer printer, is the best way to get high-quality prints from electronic cameras. Its scientists have developed a gallium arsenide chip that can convert the electronic information back into light rays that expose Polaroid instant film. The electronic camera is obviously a big gamble, but it probably is one Polaroid can’t afford not to make. If the technology works, it could make cameras like the Spectra obsolete. If it doesn’t, Booth believes, the champagne will continue to flow. Says he: ”Anyone who says instant photography is dying has his head in the sand.”

Spectra:

Polaroid's focus on making life more enjoyable appealed to millions

Stylish instruction manual

Filters to take all sorts of creative photos - even an amateur felt professional

Bag tag: very attractive layout and contrast

Unique tripod added to the Spectra's flair

Decline: In the mid-to-late 1990s Polaroid faced an increasingly uncertain future. Overall sales were stagnant – the $2.15 billion figure of 1992 being repeated in 1997, before a more dismal result was announced for 1998: $1.89 billion. Demand for instant film was on the decline, in part because of the rapid growth of one-hour photo shops for conventional film, and the company’s other forays were less than total successes. New management over diversified the product line by adding 30-40 new products annually. Foreign markets faced troubles as well. And these problems existed before the consumer digital camera era even began. Polaroid just did not have the resources to invest proper research into digital photography. Polaroid was also very protective of their thousand-or-so patents.

Apple’s future? Apple remained somewhat stagnant in the 1980s, and really didn’t see major popularity until 1999, followed by enormous growth in 2004. So, if the comparison with Polaroid is valid, Apple would currently be in the phase that Polaroid experienced in the 70’s. At this point, Polaroid only had about 20 years until the company filed for bankruptcy. It is extremely unlikely that Apple would follow the path of Polaroid, but who would’ve guessed in 1972 or 1987 that Polaroid would soon be out of the camera market? Only time will tell if Apple experiences a midlife crisis like Polaroid did before Spectra became a temporary fix.