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Digital Photography's Better Mousetrap 21 September 2004
"We are faced with a very active market with formidable competitors. We are hoping that our technology will rise above the noise." Federico Faggin, CEO of Foveon, in The New York Times
This is an update about a better mousetrap for digital cameras.
Digital cameras are a huge business. The Infotrends research group estimates that more than $17 billion of them will be sold globally in 2004. The global market share leader in digital cameras is Sony, followed by Canon, Kodak, and four other large multinationals. Competition is intense, unit sales are growing at over 40% a year, prices are coming down and picture quality is going up.
All of the cameras currently on the market use CCD or CMOS image sensors to capture a digital image. These sensors only capture one color per pixel location, while color photos are built from a palette of three colors. The camera’s software must thus mathematically interpolate the two colors not detected. This interpolation process is imperfect, resulting in false colors and reduced color resolution.
In February, Polaroid introduced a new digital camera priced under $400, the X530, with a new digital image processing technology called ‘X3.’ This technology, developed by a company called Foveon, uses sensors which can capture all three colors at once.
Camera designers predict that Foveon’s X3 technology will deliver advantages in image quality, cost, and power consumption. The Polaroid camera is the first consumer product to use the technology, however. Other companies have stayed with the older, more entrenched CCD and CMOS alternatives.
Before February, Foveon had put its X3 technology into very high-end cameras, used by professional photographers and selling for as much as $50,000. Here’s an example of a photo taken by a pro using X3 technology:
©2003 Rick Decker
X3 technology – Can you tell the difference?
Does Polaroid have a winner?
Foveon’s technology embodies the “better mousetrap” approach to new products, as in ‘build a better mousetrap, and customers will beat a path to your door.’ The technology delivers superior picture quality, and Polaroid hopes that the superior technology will give it a winning product.
But this product has a lot of problems right out of the gate, regardless of the superiority of X3 technology:
Ø Polaroid may not be the best brand-name for pioneering this new technology. Since its bankruptcy, the Polaroid name has been applied to a large number of consumer products, from batteries to DVD players. Most of these products are at the low end of the price scale – under $100.
Ø Potential purchasers can’t buy this product at most retail outlets -- they have to look for it. I did a quick search on the internet and I couldn’t find any places to buy the X530.
Ø The difference in picture quality between the two technologies may not be noticed by most purchasers. Existing technologies are improving as companies increase the number of sensors on a chip. And current picture quality is probably good enough for most customers.
Here’s the four factor diagram for Polaroid’s X530:
Polaroid X530 with Foveon X3 Technology: High Barriers and Moderate Motivators
In a dynamic and competitive market like digital photography, better technology alone won’t make much of a difference – it must be used to deliver features and performance that aren’t available elsewhere.
As next-generation cameras incorporate more video capabilities, the X3 technology may emerge as the best way to enable new features, such as the ability to print photo-quality still images from a video clip.
In addition, X3 technology could give a marketing edge to companies like Kodak or Hewlett Packard, who are investing heavily in digital photography and could use this new technology to deliver tangible differentiation. Currently, Kodak ranks third, and HP sixth, in the US market.
If Foveon’s X3 technology succeeds in the mass market, it’s hard to imagine that it would be inside the Polaroid camera. What’s needed for a successful version of this “better mousetrap” technology is a camera with significant new features from an established brand.
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