Eastman Kodak Co., one of the original suppliers of consumer and professional CD-R and CD-RW discs, discontinued its blank product lines at the close of last year, as a result of CD-R's degeneration to a commodity product. The recordable imaging technology pioneer also sold its 49 percent stake in Matsushita Manufacturing LLC of America to its partner Panasonic Disc Services Corp., which had owned the remaining 51 percent. The joint venture was formed in December 1999, essentially consisting of Kodak's two plants in Guadalajara, Mexico and Youghal, Ireland.

Throughout the life of the joint venture, the plants replicated DVD, CD-R and -RW, and applications of Kodak's part-prerecorded, part-recordable Programmable CD-ROM (CD-PROM) technology, which lay at the core of its Picture CDs.

A PDSC spokesman stated the replicator would now expand Matsushita Media Manufacturing's DVD production operations, including the conversion of some of the plants' existing CD-R manufacturing lines. A spokesman for Kodak commented that the decision was "difficult for us to make, but it was prompted by financial performance. The commodity CD-R business did not meet Kodak's financial expectations, and the market shows little sign of improving in the future."

The spokesman noted that Kodak's exit from the CD-R business has no effect on its Photo CD/Picture CD business, other CD-PROM applications, or R&D initiatives in optical media. He declined to reveal Kodak's supply arrangements for Photo CD, Picture CD and CD-PROM moving forward from the joint ventures dissolution, only stating that the supply would continue to be steady.