July 14, 2004

Photokiosks and Fujifilm

Forbes interview of Fujifilm's John Prendergast

Q&A: Fujifilm's John Prendergast
07.12.04, 5:34 PM ET

What follows is the transcript of a Forbes.com Infoimaging online chat with John Prendergast, Fujifilm's vice president of strategic business development. The chat was hosted by Penelope Patsuris of Forbes.com.

Fdceditors: Welcome, ladies and gentlemen, to this afternoon's Infoimaging chat. Our guest this afternoon is Mr. John Prendergast, who is Fujifilm's vice president of strategic business development.

Prendergast: Good afternoon, everyone.

Mmgardere: From a business perspective, what does mobile imaging bring to the table that digital and film alone do not? What differentiates mobile imaging from the rest?

Prendergast: It's not what is different about it, but the additional business that it will bring to the industry. It allows consumers to capture images that they may not have had the opportunity to capture before, resulting in more opportunities for printing, storage and other revenue streams.

Fdceditors: John, what kind of revenue does Fuji see from things like storage?

Prendergast: The opportunities in storage for Fuji and its retail partners is the fact that people will need offline storage to save their images so that allows photo storage sites like www.fujifilm.net to do business.

Fdceditors: Is that much of a money maker John, won't people prefer to store on their own hard drives?

Prendergast: It's not as much the revenue from storage as it is the subsequent revenues that we get from printing. The advantage over the hard drive is that these sites let people view their images anytime and anywhere.

Mmgardere: Do you see people printing their camphone photos at home via wireless? Will people really print at drug stores, supermarkets etc? Aren't most people printing their digital photos from home now?

Prendergast: I think people will print many different ways as they do with digital cameras, but we have seen in-store printing grow year-to-year. So while people do print at home, they also print at retail. It depends on what is most convenient for them.

Qig12: What is the status of your agreement with Sprint announced at PMA?

Prendergast: We will be launching tomorrow a print at retail option available from the Sprint picture mail website that will include the following retailers: Ritz Camera Centers, Wolf Camera and Sam's Club. And in the future we will have printing direct from the camera phone handset. We will allow consumers to select pictures on the camera phone and send their print order over the wireless network directly to the retail store, which is truly printing anytime, anywhere.

Voightr: Good afternoon, John. Digital pictures taken by digital cameras are not producing the revenue and earnings previously enjoyed by photo manufacturers. How do you see camera phones being similar, different, expansive or cannibalistic to imaging earnings?

Prendergast: We have seen an increase in printing over the year and continue to see that pattern growing. With the increase of camera phone pictures, it creates a larger pool of digital images to be printed. We see this as an expansion to an already growing printing business.

Avery22: Which of Fuji's imaging products are gaining the most momentum with consumers?

Prendergast: The number one growth market are the higher end digital cameras which have three megapixels and up. However one-time-use film cameras are also still growing and the shift to print digital at retail is also gaining momentum.

Thunderfromdownunder: I don't really understand the threat of camera phones to the digital cameras. Aren't digital cameras just really taking off and going into the mainstream? People are just learning how to print the pictures! Please explain.

Prendergast: We agree, we do not see a threat to the sale of camera phones to digital cameras at the higher end of the market. We see the lower end, two megapixel and below, may possibly have their place taken by camera phones. Until camera phones can provide all of the features and functions of a digital camera. Digital camera sales will continue to grow.

J__Garcia: Very few dual function products have been able to sustain consumer interests over a long period of time. Is the camera phone just a fad?

Prendergast: That remains to be seen. Fujifilm's approach is to be in the right position to capitalize on this market and when it becomes established behavior. One thing to note is that every carrier and handset manufacturer is focusing on this business.

Mezzaluna: What size prints can camera phones print without sacrificing quality?

Prendergast: Currently in the U.S. market, the majority of phones are VGA quality, so the image size at most allows for a 4-inch-by-6-inch print, but there is more to print quality than size, so as camera phones build in things like zoom, flash and image processing capability and increased resolution, we will see larger print sizes possible.

Mezzaluna: Have companies that released low-resolution camera phones given the device a bad name?

Prendergast: I don't think so. The first-generation camera phones were focused on picture capture and sharing. The current resolution allows that function to be successful.

Jickib: Do you see any relationship between the difficulty that camera phone users now have sending images to other phones and the extent to which consumers are inclined to print their camera phone pictures?

Prendergast: There are many ways consuemrs can print camera phone pictures. We at Fuji are looking at many technologies to make that easy for consumers. One way is through Bluetooth in a store, using a kiosk. Another way is by sending those pictures from the handset to the retailer, and also allowing people to print from a website, like we are doing with Sprint. We want to have a solution for whatever way that the consumer is most comfortable.

Dackman: Kodak has done a pretty good job positioning itself in the mobile imaging printing arena. How can Fuji respond?

Prendergast: We do not see ourselves as responding. Last year, we launched our first mobile imaging application in the U.S. on AT&T Wireless, and continue to work with all the carriers and handset manufacturers to provide storage and printing services. Our goal is to connect consumers to retailers through the carriers for printing services.

Dukenfish: How do you think the adoption of camera phones in the U.S. will differ from what has happened in Asia?

Prendergast: The Asian market is currently ahead of the U.S. market in adoption, as they are typically in technology. But the focus of the carriers and handset makers on this market in the U.S. will probably lead to a greater U.S. market adoption. And as more feature-rich camera phones become available, more consumers will adopt the technology.

Shiggy99: What do you see as the next big thing in mobile imaging? Obviously, printable camera phone photos are here with Sprint's megapixel camera phone announced last week. What is next?

Prendergast: I think printing will be the next big thing in mobile imaging. Beyond printing, I believe that storage may be another growth area.

Shiggy99: How many retail locations have wireless printing capabilities for camera phones at this time?

Prendergast: Many major retailers are looking at either implementing Bluetooth technology in their kiosks, but I don't have an exact number. People should check with their local retailers to see if they have this capability.

Annabel: What do consumers like/dislike most about camera phones?

Prendergast: I don't have consumer data, but the ability to have a camera at the ready any time, anywhere must be a very positive consumer experience. What I hear anecdotally is that sharing across carrier networks is difficult, and that consumers would like this to be easier.

Dackman: How will the advent of 3G affect printing from camera phones, if at all?

Prendergast: I believe that as carrier networks increase their capacity to send images, it will make it easier for consumers to quickly upload and send their images for printing at their favorite retailer.

Jickib: Camera phones with better resolution are now hitting the market, but what else has to happen to encourage people to print their camera phone photos?

Prendergast: Well, first network speeds need to increase. The photo industry needs to promote these services and help educate consumers about their printing options.

Qig12: What's Fujifilm's stake in the camera phone pie? Are you seeing success in your partnerships with handset manufacturers?

Prendergast: Camera phones create great opportunity for Fujifilm. We are a leading provider of lens and sensor modules to the camera phone industry. We provide technology to carriers to improve the quality of images that are captured and shared, as well as the printing opportunities and services. We have have relationships, which we have not yet announced, with most of the handset manufacturers to provide either hardware or software.

Mongoose: Do you see any economic gain when people print at home, if so, how?

Prendergast: Besides providing photographic printing solutions to retailers, Fuji has a full line of home inkjet paper. We also offer solutions for consumers to print from home to the retailers.

Qig12: What is the best, easiest way to store camera phone images?

Prendergast: We believe that the best way to store camera phone images is to print them. There are other options of course online as well as storing on offline media like CDs and DVDs. It's probably a combination of all of these things that consumers will do.

Mezzaluna: What problems in mobile imaging printing need to be worked out?

Prendergast: The two areas that need the most improvement will be image quality, which is not just resolution. It's all the technology that makes the image desirable to print, as well as easier ways for people to get the images from their handsets to a local retailer for printing, be that faster networks, removable media or other wireless technologies, like Bluetooth.

Fdceditors: Well, I think that's about all we have time for today. I'd like to thank John for his time, and I want to thank everyone for taking the time to join us. See you next time.

Forbes.com: Q&A: Fujifilm's John Prendergast

Posted by Craig at July 14, 2004 06:46 PM