Picture This: GE Digital Cameras

To woo a new generation of loyal buyers, General Electric is lending its name to a variety of youth-oriented consumer electronics products

by Olga Kharif

General Electric wants to bring more good things to life. The company known for washing machines, wind turbines, and jet engines is putting its name on a line of digital cameras and photo printers.

Under a licensing agreement, the new products—eight digital cameras and a photo printer—will be sold worldwide with the GE (GE) brand, though they are being designed and marketed by a new company, General Imaging. The Torrance (Calif.) startup will unveil the consumer gadgets at the annual Photo Marketing Assn. trade show in Las Vegas in March. Prices haven't been announced, but the cameras will be available to American consumers in mid-April.

GE and General Imaging executives wouldn't disclose their financial arrangements or identify investors in the startup, but it's clear that GE had a big hand in putting the company together. Last summer, GE convinced Hiroshi Komiya, the former president of camera maker Olympus Imaging, to give up retirement to start General Imaging, using some technology from GE's medical imaging business. Six months later, Komiya has a line of digital cameras, offering resolution from 7 to 12 megapixels, that, he says, will hit "almost every price point" in the market.

Youth Appeal

GE got out of a big swath of the consumer electronics business 20 years ago, so why jump into digital cameras now? The company is on something of a youth kick. GE wants to put its brand on a variety of consumer electronics products "to keep our brand fresh, young, and new," says Marc Bertino, president of GE Trademark Licensing. "We want to make GE relevant to all generations. Older people remember GE radios, and that helps sell appliances. Now, we are looking at the products that connect with young people."

Later this year, Bertino says, the company might unveil other consumer-oriented licensing deals. He declined to discuss which companies or products he is looking to associate with the GE brand.

In September, European manufacturer Thomson will lose the use of the GE name it acquired back in 1987, when it bought GE's consumer electronics business, selling TVs, radios, and VCRs. Thomson will continue licensing the GE brand for the home phones it sells in the U.S., but as of this fall, GE will be free to offer the use of its brand to consumer electronics manufacturers of devices other than phones.

Few industry analysts believe that putting the GE name on consumer electronics devices will help strengthen the company's brand. General Imaging is certainly viewed as a warning shot to digital camera makers Canon (CAJ), Sony (SNE), Kodak (EK), and Hewlett-Packard (HPQ). But its success is far from certain. And the licensing deal itself is raising questions as to whether GE might, in the long term, actually jeopardize its brand—one of top four most trusted brands in America—by expanding its consumer-electronics licensing program.

Consumer Confusion

Today, GE has six consumer-electronics licensees, which make everything from phones to Web cameras to Christmas lights. The $163 billion company earns an estimated $250 million from those deals, according to Nick Heymann, an analyst with Prudential Equity Group. Sure, the company has few costs associated with its licensee sales, and licensing is commonly viewed as money that falls right to the bottom line. But if the General Imaging business—or another new licensee—were to run into problems, that could hurt the GE brand.

GE is more susceptible because it's much more diverse than, say, Ferrari, which licenses its name to PC maker Acer (see BusinessWeek.com, 1/29/07, "A Racer Called Acer"). Most consumers know their notebook computers weren't designed by the car manufacturer. But with GE, the lines blur.