Bids for Eastman Kodak Start Low

Former photo giant Eastman Kodak saw bids for its digital patents from Apple

and Google

come in way below Kodak's $2.6 billion estimation. The auction between the two technology giants is now set for Wednesday, according to the

, and the two bids were between $150 million and $250 million. How Eastman Kodak came up with the astronomical estimation in the first place? The company's name was once synonymous with quality products in the photo and printing markets. It defined the market, in fact. But the company's stubborn refusal (or inability) to innovate as the digital age swept away film with a tidal wave of technology has resulted in EK filing for Chapter 11 bankruptcy protection on Thursday. It is a spectacular fall from grace that seemed near-impossible twenty years ago. A lot has changed in two decades, and few people use film anymore. Kodak has tried valiantly to keep up but these times call for technological leaders, not followers. For that reason, Kodak quickly grew to resemble an elderly gentleman trying to figure out how to insert his cassette tape into an iPod. It is difficult to pinpoint exactly what Kodak should have done to survive. The problem for all companies in the camera market is that in the digital age, we tend to not print out all of our pictures. Rather, we keep them on the computer and just print out the occasional one or two for framing. Even then, we tend to print them out ourselves. Therefore, consumers are no longer paying for a permanent train of film and then development, instead choosing to just purchase the occasional pack of photo quality paper and ink cartridges. That was Kodak's problem. Once the hardware is purchased, there was little in the way of recurring costs. Inevitably, the company caved. Back in January, CEO Antonio Perez said in a statement that, “As we complete Kodak's transformation to a digital company, our future markets will be very different from our past, and we need to organize ourselves in keeping with that evolution. This new structure simplifies the organization, focuses it more precisely on our consumer and commercial customers, and puts the right people in place to capitalize fully on the tremendous technological capabilities of Kodak. These business structure changes also allow us to allocate resources more productively, continue to significantly reduce administrative costs, and improve efficiency. We are confident that these changes will support our efforts to make the most of our opportunities.” Kodak is now aiming to emerge from Chapter 11 bankruptcy as a printer maker, and that would be made difficult if it is forced to sell its patents at such a lowball price. "The auction process, including information about bids and the identity of bidders, is confidential pursuant to an order of the Bankruptcy Court," a Kodak spokesman told the WSJ. "Disclosure of submitted bids or the identity of bidders would violate the court's order, and Kodak believes that speculation about the details and potential outcome of the auction is inappropriate." Kodak is selling a total of 1,100 patents in two seperate lots. The first lot includes patents related to capturing and processing images, the second for storing and analyzing images. Any money made from the patents must first go towards paying off the banks. No wonder, then, that it is attempting to set the price so high.