Snagging a substantial investment from a prominent venture capital firm, a new start-up is jumping into the rapidly expanding Internet fringe of the digital photography market.

Microprocessor expert and technology journalist Michael Slater leads the company, PhotoTablet Inc. Slater, who launched his company in the hopes of putting his technical design ideas to the test, began his career in microprocessor development Hewlett-Packard Co. and moved on to become editor of a high-profile industry journal called the Microprocessor Report.

Slater's new start-up is developing information appliances and Internet services that will let consumers effectively use digital cameras without a PC.

Together with PhotoTablet's founders and a few colleagues, Slater has anted up seed capital from his own pocket to get the venture off the ground.

More significantly, the venture has also roped in New Enterprise Associates (NEA), a Sand Hill Road venture capital firm whose dollars have previously supported prominent Net companies such as Biztravel.com, CareerBuilder.com and Netcentives Inc.

Slater says NEA has put in a "major investment" ranging in the millions. NEA general partner Stewart Alsop, a fellow journalist and former executive vice president of InfoWorld Publishing Company, Inc., is on the PhotoTablet board.

Slater launched the company, in part, to work out some of his pet peeves. He contends that design of most digital devices is "pathetic and frustratingly complex" and intends to set a better example. "Overall, I think the industry has done a poor job of achieving superior ease of use in consumer electronics," he said.

A dramatic shift

An avid photographer, Slater chose to focus his efforts on the emerging niche market emerging around the manipulation of digital images.

He believes there is a dramatic shift brewing in the next few years of traditional film-based photography to digital photography, driven largely by what he labels as the "post-PC-centric era."

"This will cause a great disruption in the photographic infrastructure and create an exceptional opportunity for new players," he said.

Current research in the online digital photography market backs the claim. Market researcher InfoTrends Research Group, for example, projects online photo-finishing revenue will reach US$4.4 billion worldwide by 2005.

Another Internet and digital photography market research firm, FutureImage, predicts healthy growth in online photo services, estimating that U.S. consumers already spend over $600 million annually on conventional wedding photography alone.

FutureImage also reports that the market is rapidly transitioning onto the Internet. Photographers who use online proofing are making more sales, customers are gaining greater access to more images, and photo Web sites are building up audiences and revenues as a result.

On the hardware front, research company International Data Corp projects global sales of digital cameras to hit 4.7 million this year and spiking to 22 million in 2003, with diverse product models featuring increased resolution and capacity.

In recent years, the Internet-enabled PC has become the center for viewing, sharing, trading and printing pictures along with rising scanner and color printer use.

On the Internet, various community sites have sprung up-such as Zing.com, AOL's You've Got Pictures, Yahoo! Photos and Club Photo-all providing free upload space to store and share snaps.

Some sites such as Shutterfly.com and Ofoto.com even offer to do the photo-finishing for a user's 35mm rolls and send it via mail or upload the images to a site.

A new category of smart picture frames has also emerged in the form of technologies such as Ceiva and StoryBox. The applications let grandma view her new grandchild with the click of a button on an Internet-linked frame sans PCs.

Familiar ground

The photography startup is bringing Slater back to familiar ground.

Fresh out of University of California at Berkeley as an engineering graduate, he spent three years tinkering at the R&D lab of Hewlett-Packard Co. on products designed to troubleshoot microprocessor-based systems. During his tenure, he co-authored Practical Microprocessors, HP's self-instructional text.

In the early to mid-80s, Slater was an independent Silicon Valley consultant working on various high-tech design projects. His accomplishments include a handheld blood glucose meter, a sophisticated controller system for a semiconductor equipment manufacturer, an instrumentation system for a silicon wafer saw, a secure and encrypted telephone system, and the control electronics for a 35-mm slide imaging system.

Slater, who founded Sunnyvale, California-based information services outfit MicroDesign Resources (MDR) in 1987, is likely to apply the same quiet tenacity to his new venture that eventually made the Microprocessor Report the industry's premier insider's guide to chip design.

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