Today, though, image capture is only half the story. The real growth in our business will accrue to those who give people new and better ways to use their pictures.

Take, for example, the world of opportunity that has opened on the Internet. Last year, more than $45 billion worth of products and services were sold on the Web—with the help of more than one billion online images. And 75% of those images are touched by Kodak technology.

The explosion of technologies that drive picture usage is fueling a whole new industry. Specifically, the fusion of information technology and image science has given rise to infoimaging.

The dozen new Kodak products and services arrayed across the preceding pages offer just a small glimpse into how infoimaging is redefining our business. We are playing a leading role in the use of images on the Web…in digitizing still and motion picture film...in analyzing and extracting information from digital pictures...in wireless and broadband transmission of images…in storage and preservation…and in dozens of other technologies that will shape the industry for years to come.

The performance of Kodak’s principal business units in 2000 reflects this new focus

Kodak’s Consumer Imaging business is entering the infoimaging era with a dual mission: better pictures and better sharing.

For many consumers, better pictures begin with better film—such as the new, improved Kodak Max 400 film, which delivers significantly better results for up to 25% of pictures taken, when compared to 100 and 200 speed films. In the U.S., premium film products such as Kodak Max and Advantix films comprise more than 60% of film sales.

Consumer pictures can also be significantly improved by the technologies Kodak has developed for digital photo processing. In 2000, we introduced the Kodak I.Lab system, a high-speed digital lab system for wholesale photofinishers that automatically corrects the most common problems consumers have with their pictures: poor exposure, dark shadows, graininess and red eye. We’ve seen customer satisfaction rates jump significantly among people who receive these digital prints.

As we move into the era of infoimaging, image capture will become an ubiquitous, 24/7 activity. New devices like the Kodak PalmPix camera, which turns your handheld organizer into a digital camera, will help make more people "picture- ready," anytime, anywhere. And to further ensure no one misses a potential picture-taking opportunity, we are partnering with Maytag Corporation to create a national network of high-tech Kodak Max film vending machines that carry a fresh, refrigerated supply of one-time-use cameras and film. Taking a cue from the soft drink industry, we will be "putting the product where the people are," at leisure locations such as resorts, amusement parks and zoos. Each machine will feature wireless Internet-connectivity for processing debit and charge card sales and monitoring inventory.