Polaroid invented the digital camera — then watched its film business die anyway

Polaroid, the instant photography company founded by Edwin Land, was one of the most iconic American brands of the 20th century. Its instant film was a high-margin consumable that generated recurring revenue — the razor-and-blade model that every hardware company envies.

Polaroid's own engineers developed an early digital camera prototype in the 1970s and 1980s. But the company's leadership saw digital photography as a threat to its lucrative film business and did not pursue it aggressively. The same innovator's dilemma that would later define Kodak's decline was visible in Polaroid's decisions a decade earlier.

As digital cameras went mainstream in the late 1990s, Polaroid's film sales collapsed. The company filed for bankruptcy in October 2001. The brand was later revived as a licensing entity for consumer electronics. The case illustrated how a company's most profitable product can become the obstacle to its survival when the technology shifts.