Underexposed

Polaroid filed for Chapter 11 bankruptcy protection on Friday, but no, it's not because almost nobody wants its self-developing film anymore.

Instead, the company said that its filing, which permits the company to undertake a financial restructuring, is related to a fraud matter involving Petters Group Worldwide, owner of Polaroid since 2005.

"Polaroid's financial condition was compromised by the apparent fraudulent acts perpetrated by the founder of Petters Group Worldwide, Polaroid's parent company, and certain of his associates," the Minnetonka, Minn.-based company said in a statement Friday. "The Chapter 11 process will provide Polaroid with the opportunity to restructure its balance sheet and reduce its debt to ensure the future health and sustainability of the business."

The company has "ample cash reserves" to finance the restructuring, with no new financing needed, and Chief Executive Mary L. Jeffries said operations will continue. The company's once-iconic film and film-camera business has largely fallen by the wayside, but it still sells flat-panel TVs, printers, digital cameras, and other products.

"We expect to continue our operations as normal during the reorganization and are planning for new product launches in 2009," Jeffries said. "Our operations are strong and during this process Polaroid will ship products to our retail partners, work with our suppliers and contract manufacturers to fulfill retailer demand, honor customer warranties, and employees are expected to receive their regular paychecks without interruption."

Tom Petters and four others were charged in October with participation in what authorities said was Ponzi scheme involving investment fraud, according to the Star Tribune of Minneapolis and St.Paul.

With a recession under way, it's a tough time to be getting a business back on track. But the company can take some consolation that others also are suffering.

Canon, the top digital camera maker, said it will delay construction of a new digital camera factory in Nagasaki, Japan, because of slowing consumer demand, Reuters reported Thursday. In July, the company had said it planned to start building the plant in January and begin producing cameras there in December 2009.

Polaroid, famed for photographic prints that develop within moments, is getting out of the film business.

The company is shutting down two plants in Massachusetts used to make film for professionals and artists this quarter, The Boston Globe reported Friday. A similar plant in Mexico and one in the Netherlands for making consumer film packages will close by the end the year, and the company already has stopped making instant-film cameras, Polaroid said.

The Massachusetts-based company is interested in licensing its film technology to others, but if it doesn't happen, its film will likely run out in 2009. Meanwhile, Polaroid is making a go of selling flat-panel TVs and digital photography.

Hasselblad's now-discontinued H2 medium-format camera.

(Credit: Hasselblad)

Hasselblad, a manufacturer of high-end medium-format cameras, is dropping its H2 product line, a move that spotlights the company's transition from film camera roots to its digital future.

The H2 can record images on either film or a digital sensor, but there wasn't sufficient demand for the product, so the company is devoting more resources to its more popular digital-only H3D family, Hasselblad Chief Executive Christian Poulsen said in an announcement to customers Monday.

"We have made a decision to discontinue the H2 camera line," Poulsen said. "Demand simply no longer justifies the dedicated manufacturing line required for its production."

"Medium-format" historically referred to film sizes that are bigger than that of 35mm SLRs; bigger film means higher quality in theory. Although it's technologically harder to make larger image sensors than larger film, the bigger-is-better philosophy has carried over into the digital era.

And as with SLRs, medium-format cameras typically have interchangeable lenses. But unlike SLRs, medium-format film cameras commonly have interchangeable backs, alllowing different film holders or different image sensors to be attached to a film body. Hasselblad's H2 camera could accept either film or digital backs, but the company is continuing only with a film back version that costs less than the H2, the H2F, it announced Thursday and detailed in the Monday customer announcement.

"We feel an obligation to continue to offer a film camera as long as possible, and the H2F is a good compromise that allows us to continue to offer a film alternative, while directing most of our R&D, manufacturing and support efforts to the digital products that photographers tell us they want," Hasselblad said. H1 and H2 support will continue for 10 years from the date of purchase, the company added.

Scrapping the H2 with its digital-back option will let Hasselblad concentrate its resources specifically on the H3D-II, which is available only with a built-in sensor. Its integrated design, rather than the earlier, more modular approach, is the wave of the future, Poulsen said, citing the success of SLR makers Nikon and Canon and moves toward integration by other medium-format manufacturers Sinar, Leaf and Mamiya.

Better photo quality is the reason for an integrated design, Poulsen said. "The best way to do this, as we have stated for years, is in an integrated system where all of the components, from the lens to the capture unit to the software, are designed as a system and are communicating and working together," Poulsen said.

Hasselblad's H3D, an integrated digital-only design.

(Credit: Hasselblad)

Canon is among those trying to carve out a bit of Hasselblad's business. It's pitching its 21-megapixel EOS-1Ds Mark III, due to ship in November, at the studio photography users who today are one of the key medium-format customer segments. And Canon's sales pitch has got to have some shooters listening if for no other reason than price.

Canon said its 1Ds Mark III cameras will cost about $8,000. A Hasselblad H2 costs about the same--but adding a Hasselblad digital back adds $28,000 to $38,000 to the price, depending on the model. For the H3D-II line, a 39-megapixel model costs $34,000, a 31-megapixel model $27,000 and a 22-megapixel model $25,000.

The 1Ds Mark III has an image sensor the size of a full frame of 35mm film--36x24mm. That's half the size of a 48x36mm Hasselblad H3D sensor; larger sensors permit pixels to be more sensitive or more numerous. Most digital SLRs come with a smaller sensor, but Canon's main rival, Nikon, just announced its first full-frame SLR, the $5,000 D3, with more to come. So there could be more medium-format competition in the studio market from the traditional full-frame SLR crowd.