Photo Firms See a Shot at a Rebound

Hoping to bolster a sagging photography market, Eastman Kodak Co. and four major Japanese firms unveiled a new generation of cameras and film Wednesday that is designed to replace the current 35-millimeter standard.

The new products combine higher-quality versions of traditional chemical photography technologies with digital elements that will help produce better pictures and provide a host of special features. The companies--Kodak, Canon Inc., Fuji Photo Film Co., Minolta Co. and Nikon Corp.--hope the Advanced Photo System will revolutionize the photo industry the way compact discs changed the music industry.

“The importance of the Advanced Photo System is that it’s a platform for the future,” Kodak Chief Executive George Fisher said in an interview before the formal unveiling in Universal City. “When you have the ability to mix photo and digital information, that opens a new array of possibilities.”

At the heart of the Advanced Photo System is smaller, lighter and stronger 24-millimeter film that is capable of storing digital information about lighting conditions and camera settings. Photographers can also program the cameras to record the date and time a picture was taken, along with customized titles and captions that are printed on the back of a picture when the film is developed.

The system also has features to make photography more convenient for amateurs, who account for 80% of the $60-billion worldwide photography market. Cameras are lighter and thinner, and the film comes in self-loading cartridges, eliminating the No. 1 consumer complaint about 35-millimeter film. Photographers can also choose among three picture sizes: the standard 4-by-6-inch, the 9-by-16 dimensions of a high-definition television screen, and 1-by-3 panoramic dimensions.

Some camera models will offer the ability to change from a 100-speed roll to a 400-speed roll before a full roll is shot. Users will be able to drop developed cartridges--which will replace traditional strips of negatives--into a player that displays the photos on a TV or computer screen. Other advances “have not even been imagined yet,” Fisher said.

Dozens of companies have agreed to license the technical specifications for the new system and plan to market cameras, film and other products, which should hit stores in late April. Cameras and film are estimated to cost 10% to 15% more than 35-millimeter cameras with comparable features. The prices for cameras in Kodak’s eight-model Advantix line range from $100 to more than $230.

The new system is not the first recent effort to reinvent the chemical photography business. In 1982, Kodak tried to lure consumers with the introduction of a simplified disc-format camera. The pocket-size camera offered automatic flash, frame advance and other features that made it easier to use. But after investing hundreds of millions of dollars in the technology, Kodak failed to win over consumers. Instead they embraced 35-millimeter cameras equipped with new integrated-circuit technology that made it possible to automate complicated functions such as setting the exposure time and focusing the lens.

In the long run, any new photo system faces a mortal threat from the rise of digital photography, in which film is eliminated altogether and images are captured directly on a computer storage medium. Digital pictures are far easier to store and transport and boast other advantages, but they remain expensive and it will be several years before their picture quality matches that of traditional film, observers say.

Sales of point-and-shoot 35-millimeter cameras grew 15% to 20% a year for much of the 1980s, said Bill Janawitz, Kodak’s vice president of consumer imaging and worldwide general manager of the Advanced Photo System. But in recent years, sales growth has dropped to 2% to 3%.

Kodak surveyed 20,000 customers to find out what kinds of features would induce them to buy more cameras. Janawitz expects the resulting Advanced Photo System to boost annual sales growth back into the 10% to 20% range in the next few years.

Eugene Glazer, a technology analyst with Dean Witter Reynolds in New York, said Kodak can expect to see “moderate growth” with the introduction of the new system.

“It will stimulate camera purchases, film purchases, paper consumption and reprints,” Glazer said. “But this is still competing for consumers’ attention with computers and all sorts of electronic devices,” such as camcorders and digital video disc players.

Kodak, archrival Fuji and Canon, Nikon and Minolta began coordinating their efforts to create an industrywide advanced photo standard in May 1991. Since then, the companies have invested “substantially more than $1 billion” in the new technology, Kodak spokesman Charlie Smith said.

Industry estimates put Kodak’s investment in the Advanced Photo System at about $600,000 alone. The Rochester, N.Y.-based company won 60% of the 75 patents that were issued for the new system.

The consortium registered with governments in the U.S., Japan and Europe to avoid antitrust concerns. Once the technical standards were agreed upon in April 1994, it licensed the specifications to others and agreed not to introduce any new products for two years, Smith said.