Instant printing of digital photos is the next frontier for Polaroid, chairman and CEO Gary DiCamillo said at a press conference last week. The company plans to unveil a pair of new digital printing platforms, code-named "Onyx" and "Opal," that it hopes will revive its slumping sales and position it as a key player in the emerging digital imaging industry.
Opal and Onyx are intended to increase the quality and lower the cost of rapidly printed digital images. Opal generates color print-outs; Onyx develops monochrome and black-and-white images. The systems utilize specially coated paper and a thermal process. Unlike traditional Polaroid instant photos, print-outs created with Onyx and Opal require no drying time.
Polaroid plans to work with a wide array of third-party hardware manufacturers to extend Opal and Onyx to a diverse mix of devices, DiCamillo said. Consumers will be able to purchase home printers capable of generating finished 4-x-6-inch images in less than 30 seconds; commercial printers will be able to create 50 to 60 images per minute, according to Polaroid.
Other devices in the works include portable printers that will attach to mobile phones and handheld computers, cameras with built-in instant digital printers, and an assortment of teen-focused toys for printing stickers and temporary tattoos. Polaroid also hopes to introduce Opal and Onyx to corporate and academic markets.
Details on when consumers will see tangible results of the Opal and Onyx initiatives are vague, however. Devices incorporating Onyx will hit the market by the end of 2001, DiCamillo said, and Opal devices will be available in 2002. He declined to disclose a more precise timeline. He also declined to name any of Polaroid's hardware partners, other than to say that the company has met with "lots" of interested parties, including mobile phone and PDA (personal digital assistant) manufacturers.
DiCamillo termed the new systems' speed and quality a "game changer." Polaroid needs one: The company's sales skidded into a wall in the third quarter of 2000, and it posted a £27 million operating loss for the first quarter of 2001. In his recent annual letter to shareholders, DiCamillo wrote that Polaroid expects the current economic gloom to last throughout this year; to compensate, the company is tightening expenditures and cutting 11 per cent of its workforce.
Polaroid is one of the top digital camera manufacturers in the US - last year it sold 1.3 million units - but that business isn't an attractive one, DiCamillo said.
"Selling digital cameras is not a very profitable business. It looks like the PC business, like the consumer electronics business," he said, citing two sectors struggling with low margins and price warfare. "You have to use it as a bridging mechanism."
DiCamillo deflected questions about the estimated pricing of Opal- and Onyx-printed images and devices. Final pricing will vary by product, and depend heavily on the involved hardware partners, he said. He did say that Polaroid expects the systems' pricing to be "very competitive" with rival technologies, including inkjet printing.
International Data Corp (IDC) analyst Chris Chute expressed doubts that Opal and Onyx will spark the revolution among consumers that Polaroid envisions. The products would be sensational "if they exited in a vacuum," he said. "It's going to be kind of touch-and-go. They really haven't done much partnering before in this arena."
In the kiosk market, where consumers head to the chemist to print out digital phones, Polaroid is going to hit up against Kodak, already a significant, branded presence in that niche, with a network of partnerships, Chute predicted. Fuji Photo Film will also be a threat, he said.
In the consumer market, Polaroid will face competition from a profusion of developers about to hit the market with instant-printing products, Chute said. He predicted that Opal in particular is several years away from maturity - and by the time it's a competitive system, "you're going to see so many products in that space that Polaroid entering the market is not going to be a new thing," he said.
"The technology itself (behind Opal and Onyx) is great," Chute said. "Whether it can deliver is beyond the technology. It's up to Polaroid as a business."
(IDC is a subsidiary of International Data Group, the parent company of Digit Online.)