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Putting CPXe in focus

Digital photofinishing companies are waiting to see what effect the new CPXe initiative will have on encouraging more consumers to process their digital images at retail outlets.

August 4, 2002

The development of photofinishing kiosks has been one of the happier stories in the kiosk industry.

Eastman Kodak Co.'s Picture Maker kiosks, at 36,000 units worldwide, represent the industry's largest single deployment. And other companies, ranging from Fuji Photo Film U.S.A. Inc. to German-based AutoPhotoKiosk GmbH have caught the digital-kiosk bug.

But for all of its success in the kiosk world, photofinishing companies envision an even brighter future for digital photo technology. They see a day when consumers can use their home computers, kiosks, and other devices to format, download, and print digital images. They envision consumers being able to download images of the family vacation and shoot the pictures back home to relatives before the trip is even over.

Think postcards on steroids and you can envision the industry's goals.

The device that industry officials expect to take digital technology to the next level is CPXe, an initiative announced on June 17 by the International Imaging Industry Association (I3A). Kodak, Fuji, Hewlett-Packard, and Olympus America Inc., partners in the initiative, intend to to create an operating atmosphere and network architecture that will ensure greater innovation and more choices for consumers.

"It's a community interface between all the pieces -- between the camera and the software, between the Web site where you're storing the picture and the service you are using," said Lisa Walker, I3A executive director.

So many images

The importance of digital imaging, and making consumers aware that there will soon be a growing number of photofinishing options, is reflected in the numbers the industry generates when talking about digital's future.

"Digital camera consumers are simply not using photofinishing services at retail outlets," said Ramon Garrido, director of digital imaging programs for Hewlett Packard. "The trend says that by 2005 there will be 142 billion images captures, mostly through digital cameras Â… but no one's going to make money off them because they'll be stored in hard drives only. Only storage people might make money.

"But now there's an opportunity to make it easier for people to print those images," he continued.

In a white paper released in May, I3A outlined three general scenarios where CPXe can effectively bring consumers to retailers: by accessing print services from home, accessing pictures when and where they are needed, and uploading and ordering photos from anywhere.

Open architecture, where companies supply and integrate their technological capabilities to create a Web services framework that makes it easier for consumers to bring their images to retailers for printing, is viewed as critical for the success of the initiative.

"Kodak helped shape the vision behind CPXe because it dovetails with our strategy of creating more choices for consumers to print their digital pictures and developing the easiest-to-use digital products and services," Daniel Carp, Kodak chairman and chief executive officer, said when the initiative was announced in June.

How it works

As envisioned by I3A officials, CPXe would work in a three-layer arrangement that would bring consumers and retailers together in a seamless operation.

The top layer would be application-based, featuring kiosks, desktop and Web applications, and retail counter and digital labs. The bottom layer would be services layer, with storage, sharing, and fulfillment access capabilities working from business to business and business to consumer. The middle layer is the master services directory that would link the two layers.

According to Walker, the system's beauty is the way it integrates consumers and retailers, and locates the best photofinishing option available, without being too intrusive.

"CPXe is invisible as far as the consumer is concerned," she said. "Any desktop appliance can talk to any Web site, which can talk to any retailer, which is something you can't do today."

Added Garrido: "It's like an ATM model, where you can take your card to a machine and retrieve money from your account. Behind the scenes there's lots of work to be done, but consumers don't care, they just want to get their money. CPXe is the same way."

Walker used the kiosk and a family trip as an example of how unobtrusive, yet effective, CPXe could be.

"You're on vacation at Disney World and say there's a kiosk there," she said. "You can put the media device in, off-load the pictures in storage instead of having to lug your laptop around. You can place your order to get some prints made at the Walgreen's near your house and pick them up on the way home."

Of course, such an initiative is doomed to fail unless enough significant industry players get involved. Industry officials believe a quick look at the initial CPXe roster addresses that issue.

"We're involved because we think open standards are critical," said Joe Welch, Fuji Photo Film director of marketing, retail digital systems, commercial imaging division. "It's absolutely critical that there not be technological barriers. It's about making things easier for the customers. That's why we're involved.

"Convenience is one of the key drivers in this business and always has been," he added. "Convenience, convenience, convenience has always been so important."

Discerning the meaning

Though the initiative's launch was announced in mid-June, it will probably not be until sometime near the end of the year before CPXe actually gets going. A major reason is the launch phases it must go through.

The first phase, currently underway, involves defining the market requirements for the project, working out the technical requirements and developing the system architecture.

Phase two will involved the completion of technical specifications and the CPXe business plan.

The final phase will be the formal launch of the project, which will be done in conjunction with member companies throughout the chain.

"We're not sure when we'll launch; it really depends up how the business plan goes," Walker said. "The specs will be done at the end of this year. When we'll actually get the business entity up and running is a tougher question. We've got some issues that need to be worked out."

I3A has already begun discussing some of the issues involved in business planning, releasing a business perspective white paper in May. The paper outlines the relationship CPXe could have with photographic service providers (PSP), retailers who offer digital imaging products.

"CPXe solves problems for PSP's by allowing them to offer their services on a network, and by allowing them to make use of the services of other PSP's," the white paper states.

What will ultimately make CPXe a success or failure will be its ability to draw more consumers to the technology. Carp believes it is possible.

"CPXe represents an important example of how the convergence of image science and information technology -- or infoimaging -- creates new business opportunities for the industry," Carp said in June.

Get together now

Walker would not address specifics of the initiative's cost, and said cost of the first phase is "a drop in the bucket" of the program's ultimate total. The intiative is financed by member fees, which she said are assesed based on the size of the company.

Walker said that some companies feel a greater sense of urgency to make this work, but that she expects most leading photofinishing companies to get behind CPXe as it offers proof of concept.

"It's like any other standards effort; it doesn't work unless you have a critical mass of key players," she said. "If you get enough to get going, they can prove the momentum. There's sort of a minimum threshold for critical mass. Some people have a more immediate need and are willing to make upfront investments. Some don't."