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September 28, 1998

INTEL MOVES ON DIGITAL CAMERA SPACE; EYES STANDARD

By CBR Staff Writer

Not content with its virtual monopoly over the PC-chip market, Intel Corp revealed yesterday that it’s started developing a standard platform for the manufacture of digital cameras. Intel said it is working with camera giant, Eastman Kodak Co, to develop a common platform for digital camera manufacturers in a bid to drive hardware prices down and speed up consumer acceptance of the technology. The announcement came during a press conference in New York yesterday, where the two companies got tog ether to demonstrate a new product called Kodak Picture CD; what executives referred to as the first major step on the transition roadmap from traditional analogue to digital photography, and the first product resulting from the companies’ six month digital imaging partnership. But come question time, most analysts were more interested in pinning down Intel’s plans to create and license a standard platform for future digital camera product design. Craig Barrett, Intel’s president and chief ex ecutive officer told ComputerWire that the chip giant got involved with Kodak to jump-start consumer interest in digital technology, which in turn would drive demand for its core chip products. He said Intel would work closely with Kodak on the new specification and then once the platform was finalized, Intel would license the technology, for an undisclosed fee, to other camera manufacturers. Any revenues from licensing agreements will be jointly shared between Intel and Kodak, Barrett said. Under the agreement, the companies said they will invest $150m over three years in advertising and promotions. Intel has also invested heavily in Kodak’s Qualex photo-finishing labs to enable the company to offer the service, although neither company would disclose the sum. There’s nothing new about digital photography per se, but what’s new about Picture CD is that it combines a customer’s digitized photos with editing and manipulation software all on the same CD. The first version of the CD, currently in pilot test phase in Salt Lake City and Indianapolis, works with analog cameras only and is designed to lure traditional photographic die-hards to digital technology. Customers can already get digitized versions of analogue photos now, but the images are returned to them as files on CDs or floppy drives. Kodak offers this type of service, as does Konica Corp, and recently, Iomega Corp introduced its Clik floppy drive (CI No 3,403) with the digital camera market in mind. One problem with these solutions is that users also have to pay for separate editing software. Picture CD aims to simplify the whole process by bundling all the software you’ll need, including the ability to send photos via e-mail, on the one disk. At the moment, only one roll of 35mm film will fit on each CD, but Kodak officials said the final product, due for roll out in early 1999, could change according to feed back from the pilot studies. Each CD will include a standard set of editing features and per iodically, Kodak will add new ones, which can all be downloaded and stored on a PC’s hard drive. Ron Glaz, a research analyst in IDC’s digital cameras and scanners division, said it made sense for Intel to get into the digital imaging market as it was facing serious issues with its competitors and growth in the PC industry was slowing down. He said there were 964, 963 million digital cameras sold in 1997 and that IDC expects the number to grow to 11.8m by 2002.

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