Who Needs a Wireless Digital Camera?

By Adam Stone

March 21, 2005

PhotoChannel is betting that Wi-Fi will be a great way to get pictures it can print for consumers -- but some analysts believe that in this case, wireless takes a back seat.

The way Kyle Hall has it figured, Wi-Fi may not be the answer to every question ever asked, but it can at least be one more "on ramp."

The executive vice president of PhotoChannel Networks is looking specifically at the world of retail photo finishing. Right now there are lots of ways to get your digital photos to the print shop: send them via the Internet, hand your memory card across the counter, or download pics at a freestanding kiosk.

Hall envisions Wi-Fi not as a replacement to all these different channels, but as a complement. Retailers need volume to make photo finishing pay, and Wi-Fi could perhaps be just one more way to get the pictures in the pipeline.

It all hinges on the adoption of new devices. "We see in the very near future people sending pictures right from their Wi-Fi enabled digital cameras," he explains.

Several manufacturers have announced the imminent arrival of such cameras, but some analysts question whether consumers will rush to buy them.

"I hate to be a cynic, but why would I even want Wi-Fi in a camera?" asks Eddie Hold, a wireless analyst with research firm Current Analysis in Sterling, Va. "It's already got a card that I can put in and take out. Why would I carry a $300 camera to a shopping mall when I can carry this little card that no one will even know I have?"

Even if adoption is slow, Hall said, PhotoChannel's business model allows for the gradual adoption of Wi-Fi in this setting.

The company has been around since 1995 and already has a steady revenue stream. It provides the back-end architecture which allows consumers to send in photos for processing, either online or at some 7,800 retail locations. Customers include Wal-Mart Canada and Black's Photo. Hall says he can add on the Wi-Fi capability at a minimal cost for customers already using PhotoChannel's infrastructure, by "piggybacking" the Wi-Fi service on top of the same high-speed data line already used for delivering in-store printing orders. This in turn opens up a potential new pipeline with little financial risk.

"If the cost to upgrade our systems isn't that great, and if it provides one more opportunity to bring in customers, we believe it is worthwhile doing at this stage," Hall says.

It appears to be a compelling pitch. Hall said Wal-Mart Canada and Black's Photo together have asked to have some 400 locations live with Wi-Fi by the end of May.

Analysts say that cameras may not be the only devices driving demand for this kind of capability. "In December 2004, our research showed that 13 percent of consumers had taken and/or shared photos taken with their phone," notes Julie Ask, senior analyst with Jupiter Research. "Six percent had transferred photos from a phone to a PC."

Perhaps Wi-Fi enabled camera phones will justify an investment in PhotoChannel's Wi-Fi offering while retailers wait for Wi-Fi cameras to catch on.

When will the cameras catch on? Hall says it is up to the manufacturers, who will have to make the price attractive. Kodak's first-to-market EasyShare Wi-Fi digital camera is slated to appear in June with a hefty $599 price tag.

Six hundred dollars for an 802.11-enabled camera? Let's really think about it. Wi-Fi is first and last a networking protocol. It creates networks. Do you want to make your camera a part of a network? Why?

Some say it is inconvenient to plug in a USB cable every time you want to download pictures to your PC. But is it really that hard? Hall says people will not want to wait in line to pop their memory cards into kiosks at retail locations. But are the lines really that long?

The ever-skeptical Eddie Hold can't help but wonder if this is merely a case of Wi-Fi for the sake of Wi-Fi. "It seems like people are simply over-engineering these cameras," he says.



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