Intel and Digital cameras.............
From the Semiconductor pages of Electronic News: February 16, 1998 Issue
Digital Camera Strategy
Intel sets up imaging operation for non-PC applications; selling more chips is the goal
By Jim DeTar
New Orleans--A contingent from Intel was at the Photographic Marketing Association (PMA)
conference here last week quietly launching a campaign in the digital camera market.
In a joint interview, Don Whiteside, GM of Intel's new Digital Imaging and Video Division, and
Len Wegner, who heads the digital components portion of the division, laid out the company's
strategy to drive the digital camera market--and sell a lot of Intel chips in the process. "Ours is a
new division chartered with being shepherds of Intel's digital imaging strategy," Mr. Whiteside
said. "Much of that strategy we used to refer to as our 'visual computing PC' (platform). My
group is expanding our view of digital imaging beyond the PC and looking at what additional value
we can bring to the market, what additional businesses we can create."
"This business was put into the Intel New Business Ventures area. Intel will continue to invest
heavily in the core PC platform," he added. "We will invest to be sure the connected PC platform
connects. Non-direct PCs are under my domain. It was put off separately so we could focus on
it, recognizing that the business paradigm is significantly different from the PC business." Mr.
Wegner commented that: "We are offering a complete reference design in order to minimize the
time-to-market delta. In order to do that in a quick and efficient manner, we had to focus on a
few key collaborators." Intel announced last November that it is partnering with Lighton, Aztec
and Samsung for various digital camera technologies. Using partners reduces the time to market
significantly, Mr. Wegner said. Whereas it would take 18 to 24 months without the collaborative
effort to bring a new camera to market, that time is reduced to six months through the
collaborative effort.
The Polaroid Connection
At PMA Intel, with Polaroid Corp., unveiled a partnership for Polaroid to use the Intel 971 PC
Camera Kit, which includes the recently introduced Intel CMOS 971 sensor; PC camera
embedded processor, logic and firmware; flash memory miniature card; and PC camera utility
manager software. Polaroid expects to offer digital cameras based on the Intel platform by 2H98,
targeting the low end of the market in terms of price and feature set.
Michael Bernstein, senior consultant for emerging technologies at market research firm Semico
Research, commented: "When Intel introduced its 971 CMOS sensor in late 1997 it was missing
a key element, endorsement by a major camera manufacturer. Now, with Polaroid in its camp,
Intel has gained acceptance and recognition for its technology.
"Polaroid contracted with an Asian manufacturer, believed to be Samsung, to build the camera, so
it did not have to commit major resources to fund this new product," Mr. Bernstein added. The
Intel/Polaroid team face stiff competition though on a variety of fronts. More than 24 companies,
including Agfa, Kodak, Ricoh, SoundVision, Vivitar and others, are now selling about 100 digital
camera models in the U.S., according to PMA. And, at the chip level, "Intel is one of many
semiconductor companies trying to apply CMOS to this space," Mr. Whiteside admits.
Visionary Or Resource Wasting?
Because the digital camera market is still nascent, however, it remains to be seen whether Intel is
a visionary company helping create a market or whether the company is squandering precious
resources that could be used instead to battle AMD, National Semiconductor/Cyrix and
Integrated Device Technology/Centaur which are all battering at the castle walls with low-end
x86-compatible processors for the fast growing segment zero (sub-$1,000) PC market.
Although Intel is jumping into digital cameras with both feet, many analysts don't think that market
will develop to any significant degree for several years. Jonathan Rosenzweig, an analyst at
Salomon Smith Barney, is quoted in industry reports saying that consumers are not going to be to
quick to move to digital. "I don't think you're going to see digital imaging really take off for quite a
while." That jibes with industry projections.
According to PMA statistics, 350,000 digital cameras priced at or lower than $1,200 were sold
in 1996 and sales are expected to slowly increase to about 4 million units by the year 2001. Even
that number, however, is a small fraction of the 50 million cameras that are sold annually,
according to industry estimates. Intel's Mr. Whiteside says Intel knows it is going to be a long haul
and it is prepared for the ride. "Our belief is that Intel needs to play a leadership role in the digital
and video imaging industry.
"The fundamental reason we are getting into this business is that digital imaging is, whether you
talk to Intel or any industry analyst, an application that is going to bring new users to connected
visual computing. It is in our best interest to accelerate this and make it cost-effective. Getting in
on the ground floor gives us the best opportunity," Mr. Whiteside said.
-------------------------------------------
Sidebar
Intel's Big Systems Adventure
Santa Clara, Calif.--The recently-introduced 971 PCI Camera Kit for digital
still cameras is not Intel's first foray into the digital imaging market. Late last year,
in time for the holiday shopping season, Intel quietly began shipping a full digital
imaging camera system, dubbed the Create & Share Camera Pack, for still and
video imaging on PCs.
The Create & Share camera marks one of the few times that Intel has wandered
outside of the microprocessor/microcontroller realm into the systems and
subsystems businesses. The company has had mixed success in these segments.
Intel, like other broad line chip suppliers such as Advanced Micro Devices,
struggled in the programmable logic market. But unlike AMD, which formed its
Vantis subsidiary and held on, Intel decided to throw in the towel and sold its
programmable logic business to Altera in 1994 (EN, July 18, Oct. 3, 1994).
Similarly, Intel in that same timeframe initiated a drive in the motherboard segment
and experienced some success, only to be rebuffed by a counter-strike by the
Taiwanese motherboard vendors from whom Intel had been taking market share
(EN, April 4, 1994). In 1995, Intel sold entire PCs to Toshiba to relabel (EN,
Aug. 7, 1995) which aroused the ire of other PC OEMs.
On the other hand, Intel has for many years sold high-end supercomputers that
utilized arrays of its chips, and the company has had a large degree of success
selling chipsets to accompany its microprocessors. |
