Kodak sees picture of future in high-quality camera phones

Camera phone snapshots are, by and large, like fast food - convenient, yet not usually all that good. But their popularity is exploding, with more Americans today having camera phones than digital cameras.

Now Eastman Kodak Co., one of the world's largest makers of digital cameras, is banking on camera phones appearing on the market by next year that shoot high-quality, 5-megapixel digital photos. Those photos would be due to a new line of inexpensive image sensors Kodak is starting to market. The push into the CMOS image sensor business comes as Kodak is in the midst of a 10-year research-and-development collaboration with cell phone giant Motorola Inc. Kodak Chief Executive Officer Antonio M. Perez said earlier this year that within the next six months, the two companies will roll out the first products to have a Kodak contribution.

Camera phones are increasingly ubiquitous. The number in the United States leaped from 48 million in November 2005 to 132 million in November 2007, according to the research firm M:Metrics.

Meanwhile, the number of digital cameras in the country hit 106 million in 2007, according to the Photo Marketing Association.
Both Kodak and some industry experts see camera phones as complementary to digital cameras rather than as a product line that will cannibalize digital camera sales.

"The camera phone is almost getting more people interested in photography," says Carrie Sylvester, a senior research analyst for InfoTrends, an imaging industry market research firm. "They're using those for spontaneous, fun shots."
"I don't think anyone would take a cell phone to a daughter's graduation or other special event," said Kodak President Philip Faraci.

Kodak displayed a prototype of its tiny CMOS sensor last month in a meeting with major investors in New York City and at a major trade show, the GSMA Mobile World Conference, in Barcelona, Spain.

The sensor chip is an industry standard quarter-inch size. But while standard camera phone sensors top out at about 3 million pixels in that footprint, Kodak is promising sensors with 5 million pixels packed in - and thus 5-megapixel images.Kodak also promises better results when pictures are taken in low light

Kodak plans to start shipping samples to prospective customers this spring, with expectations of selling large volumes later in the year. Production of the sensors will be outsourced to Taiwan, McNiffe says.
Kodak's sensor business remains a small part of the Rochester-based photo and imaging company overall, Perez says. "It's going to take time for us to build significant revenue, no doubt," he says.

The CMOS sensor business is dominated by a few giants, including Sony, Samsung and Micron Technology.