H-P to License Camera-Phone Technology

Hewlett-Packard(HPQ - Cramer's Take - Stockpickr) wants a piece of the camera-phone market.

The Palo Alto, Calif., company said Tuesday that its photo-enhancing technology will be available on camera-equipped cell phones next year.

The announcement is the latest deal to come out of H-P's growing intellectual-property licensing group and could help the company tap into the next big thing in consumer photography.

The technology, which was originally designed for H-P's own line of digital point-and-shoot cameras, improves picture quality by automatically correcting and enhancing images.

While cell-phone pictures are typically grainy, spur-of-the-moment snapshots that are deleted after being viewed, H-P hopes its technology will prompt more consumers to print the images and save them in the same way they do with photographs taken with cameras -- not a bad thing for a company whose most profitable business is printers, ink cartridges and paper.

H-P is licensing the imaging technology to Flextronics(FLEX - Cramer's Take - Stockpickr), a Singapore-based contract manufacturer, which designs and assembles camera-phone modules and cell phones. Flextronics will pay H-P an undisclosed royalty for camera modules featuring its intellectual property.

"Flextronics is the ideal partner to harness the capabilities of H-P's digital-imaging technology to open new markets," H-P Imaging and Printer Group VP Tara Bunch said in a statement. "The agreement is a breakthrough for the booming camera-phone market because it will transform photos into higher-quality images and keepsakes to share and print."