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Q&A: Microsoft aids upper-crust camera company

Phase One, which makes high-end digital camera products, has a new partnership with Microsoft. Here's how the CEO thinks it'll help.

PhaseOne Chief Executive Henrik Hakonsson is bridging a vast digital photography divide.

A medium-format camera with a Phase One digital back.

His company makes top-end image sensor housings called digital backs, each costing tens of thousands of dollars and attaching to high-end medium-format cameras with similarly high price tags. But he just signed a partnership with Microsoft, which gears its products for the broadest possible audience.

The Phase One product that brings these two worlds together is Capture One, software that helped pioneer the area of processing "raw" images taken directly from image sensors without any in-camera processing. The software exists chiefly for Phase One's high-end customers, but it also supports many mainstream cameras.

Through the partnership, terms of which were not disclosed, Microsoft will help Phase One tackle technical challenges of improving that software, Hakonsson said. And according to Josh Weisberg, Microsoft's director of digital imaging evangelism, Capture One will be able to handle files encoded with Microsoft's HD Photo format, which the company is advocating as a higher-quality replacement for the ubiquitous JPEG and is standardizing as JPEG XR.

Phase One, based in Copenhagen, was founded in 1993 and is owned by its 130 employees. On the hardware side, its top-end P45+ back uses a 39-megapixel sensor from Kodak. It sells two versions of Capture One, the $499 Pro and the $99 LE, but with the upcoming version 4, the LE version will simply be named Capture One 4.

I chatted with Hakonsson about his company's software, hardware, and Microsoft alliance earlier this month. Here's an edited transcript.

Phase One CEO Henrik Hakonsson Phase One

Q: Most people haven't heard of Phase One. Can you give us a thumbnail sketch?
Hakonsson: Phase One is the world's leading digital camera back manufacturer. If you take a copy of Vogue magazine and look at the first 50 pages, approximately 80 percent of the images are shot with Phase One digital back and Capture One software. Our position in the market is the very top maybe 1 percent of the photo segment--shooters who work with the biggest clients and the most demanding photographic applications.

What's your sales volume for digital backs?
The global market will exceed 10,000. Phase 1 has more than 50 percent of the market. Some of our digital back competitors are working to make less costly solutions. We try to target the most demanding photographers.

What will result from the Microsoft partnership?
For Phase One, the main reason for doing this was the ability to get access to some tools which will help us provide better services for the kind of photographers we're working with. We're getting into file sizes that may be two to three times what we have today, and the speed of being able to handle these files requires other tools than what we have in our portfolio.

For me, performance is No. 1. The parameters on which we position our product are speed, image quality, and ease of use. On the performance side, we needed a partner.

How big are your image files?
Typically 150MB. We expect larger file sizes for the next two to three years. The ability to make sure that people can browse and process images is important going forward. Microsoft has a range of tools for assuring that we can serve our high-end customers, who are the ones we are predominantly concerned about.

Does that include working better on computers with multicore processors?
You will see that an eight-core machine will work very efficiently with Capture One 4. That was already in progress, but it's clear that with the know-how they have, we are preparing ourselves for being able to better utilize the tools which are provided on the coming computing generations.

Will Microsoft's technology show up in Capture One 4?
We would have liked to have done this deal awhile ago, but things take time. I don't see that we will be able to implement any of the benefits for the Capture One 4.0. For 4.1, I would be disappointed if you didn't see any benefits there.

Will the changes also help the Mac OS X version of Capture One?
Yes. For us it's very important that both the platforms we support have a similar high level of performance.

In the years since Capture One 3 was released, we've seen the arrival of major new competitors such as Apple Aperture and Adobe Photoshop Lightroom. How has that affected you?
You can say a lot of good things about Aperture and Lightroom for being broad applications, and there are some functions in there that are great for many of our customers, but we want to make sure the actual capture experience and the ability to work with many files are superior in Capture One than what it would be in Aperture or Lightroom...We're very focused on capture workflow, not retrieving photos and on (image) database workings. Other guys invented that, and they do good job of it. We try to focus on the image quality you can get out of the file.

What's coming with version 4?
There are a vast amount of improvements. The very important one for us is we have tripled the speed. We have a whole range of image quality improvements. And it's a complete new application. We have redone the whole user interface. We believe the UI will be the most likeable UI. We worked closely with range of photographers to do a UI which suits their likes and needs.

Will there be another beta version after the one you issued in October? When will version 4 be done?
That will be last beta. The final version will be ready in 2007.

How high a priority is developing Capture One for your non-professional customers?
Capture One has wide distribution due to another partnership we had we had with SanDisk. These are all for us very important customers. We would like to be able to offer them further functionality, and we would ideally like to be able to lift these people up to our Pro version.

We are not trying to be the global player in every enthusiast market. The high-end market is for us. We participate in the enthusiast market because we believe it's a very important segment of customers who are testing and commenting and who often take more time out to challenge you. We have learned a lot from our enthusiast customers in terms of things they really prefer. Many pros either like or dislike software, and if don't like it, they don't take time out to explain what they would like you to improve.

You work with both hardware and software. What do you think of Adobe's Digital Negative (DNG) format (a file format designed to guard against problems resulting from the profusion of proprietary raw image formats)?
There will be read and write DNG support for Capture One 4, so the customers who work through a DNG workflow can work with Capture One or can work with other software applications. We want to provide customers with broadest possible flexibility in terms of what tools and packages they can work with.

Would you support DNG for your digital backs?
We think there are some limitations in terms of quality that we are not totally happy about.

On the hardware side of your business, Hasselblad, Mamiya and other medium-format companies are moving toward cameras with an integrated digital back, which means yours can't be attached to those cameras. Are you concerned about integration? (Note: after this interview, Phase One announced a technology, intellectual property, and sales partnership with Mamiya Digital Imaging that involves continued development of modular medium-format cameras.)
With the vast majority of the customers we're working for, I see the benefits of flexibility in terms of being able to work with different camera systems. I don't think it's a question of either/or. You will see some integration in medium format, but the vast majority of photographers will choose flexibility over getting a few extra features (from integration). The lifetime of a medium-format camera housing is way longer than the imaging unit.

Nikon and Sony have introduced new SLR (single-lens reflex) cameras that use CMOS (complementary metal oxide semiconductor) manufacturing technology, which appears to be catching on more widely for higher-end cameras, but the Kodak sensors Phase One uses are built use the more traditional CCD (charge-coupled device) technology. Do you think larger-format sensors will move to CMOS?
Not in the foreseeable future, in our view. For the 50 to 80 megapixel sensors on the horizon, we still feel the CCD will be the best way forward. We are carefully monitoring CMOS all the time, but for the customers we working for we have not found the quality we're looking for.