September 21, 2004

Mobile Photo Phones

Kodak hears call of camera phones, answers big time

By Peter J. Howe, Globe Staff | September 20, 2004

Cellphones that can take and display digital photographs have become enough of a market force to attract major attention from a company long synonymous with photography: Eastman Kodak Co.

Kodak last week launched a service that lets people who subscribe to its online digital photography service transfer pictures they've taken with a conventional digital camera to a cellphone with a full-color screen to be used as the phone-screen ''wallpaper." The service, which works with phones from all major carriers except Sprint PCS, costs $1.49 per image, with the first two transfers free. Kodak uses software to adjust the size of the image to match any of dozens of different cellphone screens.

At the same time, with industry analysts projecting that over 20 million wireless camera phones will be in service nationally by the end of this year, triple the number as of last December, Kodak is expanding Ofoto as a way to catalog and print pictures taken with cellphone cameras as well as digital cameras. It began with a deal launched this spring with industry leader Verizon Wireless -- now being extended to other carriers -- that lets people use their handsets to view Ofoto pictures they have stored online.

More than 8,000 of Kodak's 12,000 PictureMaker digital-imaging kiosks in US pharmacies and photography stores have been upgraded over the last year to be able to print out copies of pictures taken on camera phones through installing infra-red and Bluetooth systems for transferring the images from the phone to the kiosk printer, said Ofoto spokeswoman Jodi Sacks.

Sometime during 2003, cellphones with built-in cameras began outselling conventional digital cameras worldwide, according to Strategy Analytics, a Newton market research firm. Wireless camera phones are poised to start grabbing an even larger share of the digital photography market now that top handset manufacturers such as Kyocera and Nokia are beginning to roll out phones with much sharper resolution 1-megapixel image capacity and improved features like zoom lenses.

Compared to early generations of camera phones whose grainy thumbnail shots are best viewed only on a cellphone, the new generation of phones will be able to yield snapshots similar in clarity to inexpensive digital cameras.

All of those converging trends make wireless camera phones an obvious, even unavoidable area for digital photography companies to focus on.

''Kodak has taken a clear turn toward digital, and what they're doing with wireless is a natural extension of what Ofoto does," said Patrick Zerbib, vice president of the wireless practice with Adventis, a Boston consulting firm. Kodak has more than 15 million Ofoto subscribers, but has not determined how many of them also use camera phones. To save cellphone pictures at Ofoto, users just register their cellphone number, then e-mail images from their phone to [email protected]

Dave Geary, senior vice president of Kodak Mobile Services, said from Kodak's standpoint, ''We're really looking at these phones as another set of digital cameras." At the same time, as the image quality and color capacity of handset screens has improved, ''you have this great viewing device that you carry around in your pocket. Our vision is that you should be able to share and relive your favorite images anytime, anywhere, including on your phone."

Sprint, the fourth-largest US wireless carrier, is developing its own service with Fuji Photo Film U.S.A. Inc. for printing out cellphone pictures that it hopes to launch later this year.

Zerbib said over time, assuming wireless photography does become a major revenue source, Kodak may face a more tense relationship with carriers wanting to offer their own online picture-sharing services and cut out Ofoto. ''Carriers will fight to try to remain in control of the end user," he said.

But for now, wireless companies seem to view Kodak's involvement as a way to promote sales of high-end camera phones and premium data plans that cover sending and downloading photos. ''We view the Kodak feature as a welcome enhancement to wireless picture-taking, which is very popular among our customers," said AT&T Wireless Services Inc. spokesman Martin A. Nee. ''It allows our customers to have easier access to pictures and even more choices to personalize their phones." / Business / Technology / Kodak hears call of camera phones, answers big time

Posted by Craig at September 21, 2004 02:06 PM