Swinging Polaroid

The extraordinary success of the Polaroid Corp. has been achieved in the face of the fact that its picture-in-a-moment cameras long cost more than $100, well above what most Americans want to pay for a camera. In March, Polaroid moved below $100 for the first time by introducing two color cameras listing at $59.95 and $89.95. This week the company makes a strong bid for the 70% of Americans who buy even cheaper cameras by bringing out its first low-priced model: the black-and-white $19.95 Swinger.

Gone in a Weekend. The Swinger arrives on the scene at a time when both buyers and investors seem to be more in love with Polaroid than ever. The company's first-half sales jumped 32% (to $68 million) and its profits increased 69% (to $8,500,000). The two new color cameras have moved so well that Polaroid is selling almost four times as many cameras as last year, cannot keep up with demand. In the past two months Polaroid's stock has shot up from 65 to 85. While the blue chips in the Dow-Jones industrial average are currently priced at a conservative ratio of 18 times per-share earnings, Polaroid is selling at 61 to 1.

Though the plastic-cased Swinger has its limits--it takes only black-and-white, wallet-sized pictures that are about 40%' smaller than the ones taken by the other Polaroid cameras now being sold--Polaroid believes that it has a huge market. One gimmick in the new model: a little sign in the view finder flashes "yes" or "no" to tell the photographer whether the light is right. The company launched the camera in Canada last July, sold out practically all its first month's supply in one weekend, now has to ration its stocks to Canadian dealers. The Swinger says President Edwin Land, inventor of the Polaroid Land Camera, "will find its market among teenagers, young married people and families that want a second camera." To reach them better Polaroid will broaden its distribution system, sell its cameras in drugstores and college book stores for the first time. Film Passes Cameras. The real significance of the Swinger, however is that it will greatly expand sales of Polaroid film. An eight-picture roll of film for the Swinger will retail at $1.99 (compared with $2.55 for black-and-white Polaroid packs and $5.19 for color Polaroid packs). Polaroid's strategy is to create lower-priced cameras in order to increase demand for its film. The company's after-tax profits run to a high 12 1/2% of sales, but its profit margin on film is even steeper, perhaps as high as 30%. Earlier this year, Land disclosed that Polaroid had passed a significant milestone: sales of film exceeded sales of cameras for the first time, will account for 55% of the company's volume in 1965. Polaroid has thus changed from a company selling mostly a high-priced, seldom-bought product to one marketing a low-priced, often replaced product, somewhat like toothpaste or razor blades.

Polaroid subcontracts most of its camera manufacturing--U.S. Time Corp makes most Polaroids, Bell & Howell will produce the Swinger in the U.S.--but it is so deeply committed to the film business that it plans to erect a nine-building complex of film plants over the next ten years. Land is also developing a film that will produce instant color transparencies, and negotiating with Tex Thornton's Litton Industries to enter jointly the office-copier business. Polaroid recently opened a film plant in The Netherlands, this fall will open another in Scotland; later this year, U.S. Time will begin producing Swingers in Scotland. One indicator of Polaroid's foreign potential is that in camera-heavy West Germany, despite higher prices than in the U.S., sales of its cameras this year have increased twentyfold.

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