The deal is expected to generate between US$500 million to US$1 billion in annual revenue within five years, officials said. The companies declined to disclose the scope of their investment.
Until now, Kodak and Hewlett-Packard have been competitors in the digital-photography arena. Kodak offers a PhotoNet service that posts images taken from traditional cameras on the Web so that consumers can preview them from their home computers and easily share them with others, and Hewlett-Packard has a similar service it calls Cartogra.
Under the deal, according to a person familiar with the matter, Cartogra users will be able to get photo-quality reprints made by Kodak labs.
Most consumer printers produce low resolution pictures. But Kodak and Hewlett-Packard say the inkjet machines developed from their venture will produce pictures comparable to the high-resolution images from retailers' standard, chemical-based mini photo labs.
Digital push H-P has recently renewed its push into digital imagery, having introduced new lines of digital cameras and ink-jet printers capable of printing high-quality digital photographs. One person familiar with the new joint venture with Kodak suggested that the venture will use and promote H-P's ink-jet printing technology -- a big deal for H-P, which reaps fat profits from the sale of consumable ink-jet cartridges.
Kodak, which also has an online photography venture with America Online, has been pushing hard in the digital-photography arena for several years.
