With the resolution of camera phones now in the 1 megapixel range, their functionality has evolved from gimmicky feature to sophisticated photography method. Nethra Imaging aims to accelerate that transition with a technology that could further enhance photo quality.

Nethra, which means “human eye” in Sanskrit, is launching its inaugural line of camera phone modules. Nethra officials claim the modules will allow vendors to produce mid-range camera phones with resolutions as high as 3 megapixels without sacrificing quality and without sending incremental manufacturing costs skyrocketing.

“We've talked to the top-tier OEMs, and we know that they want this kind of technology,” said Murty Bhavana, Nethra's co-founder and vice president of marketing. “They want to take the market away from the still-digital camera industry.”

Since basic 3 megapixel digital cameras are now selling in the $100 range, it's difficult to imagine a vendor can pack its capabilities into a $150 to $200 handset, but Bhavana said the feat isn't so great. “Every building block you need for digital still imaging is already in the phone,” Bhavana said. Memory, power, storage, displays and interfaces are already there; what are still necessary are the optical components themselves and an image processor.

Typically what distinguishes a camera phone architecture from a digital camera architecture is the way optical sensor and image processor components are grouped. A camera usually has a dedicated optical sensor and lens and a dedicated image processor, which renders, adjusts and processes the image. A camera phone integrates those functions into a single component, forcing the sensor and the processor to share the same resources. While this cuts down on costs significantly, there's a limit to the level of quality and resolution this architecture can achieve, Bhavana said, resulting in the grainy, blurry and often pixilated images of current camera phones.

While some vendors like Nokia and Samsung have produced camera phones in the 5 megapixel range, they've done so using a digital-camera architecture, investing money in improved optics and image processors. The results produce excellent photos, but the handsets costs escalate into the $500 range. Nethra's approach is to keep the camera phone architecture in place but separate the components on a single system-on-a-chip (SOC). The freed processor is bulked up with new algorithms that increase resolution and capture speeds as well as incorporate bells and whistles like auto focus, auto white balance and red-eye correction. The basic optical sensor remains unchanged. Bhavana said the incremental increase in cost for Nethra's SOC would be about $1 more than a typical 1 megapixel camera phone today, seven or eight times less than using a digital camera architecture.

Nethra clearly has a vision of the camera phone supplanting the digital camera in the consumer electronics market — a vision shared by Texas Instruments and Qualcomm, which are developing their own integrated high-resolution imaging modules. But there's still a question of how much traction the camera phone will gain against a digital camera industry that is innovating just as quickly as the handset industry, said Jill Aldort, senior consultant for InfoTrends/CAP Ventures, a research firm that tracks consumer electronics closely.

While InfoTrends expects camera phones to ramp up quickly (from 24.2 million in North America in 2004 to 98.9 million in 2009), its impact on the digital camera market will probably only affect low-end digital camera sales, Aldort said.

“People will most likely have both capture devices,” Aldort said. “Consumers definitely say they want better picture quality from their camera phones, but they don't want to pay a lot for that quality. While these camera phones will be more than just novelty devices, they won't replace digital cameras themselves.”