Phase One Raises The Bar Again
By now you’ve likely read about the new Phase One IQ4 series. If not, head over to our “Phase One IQ4 150mp – 17 Surprises” article to read a succinct review of those features. Like the IQ3, IQ2, IQ1 and P+ before it, the IQ4 broaches many “firsts” such as first camera to feature the Capture One engine inside the camera, the first back to ISO25,600, the first camera with native wireless tethering to Capture One, the first camera with a 150mp sensor, and the first medium-format camera with a BSI sensor.
But this article is not about the IQ4 150mp, but rather about the road that led to it. Instead, this article answers the question “In a crowded camera industry worth billions, how does Phase One stay in the lead?”
The answer is multifaceted: they aren’t as small as you think, they keep growing and finding new markets, they have a long history in digital imaging, and they maintain a tight product focus.
It’s Not So Small Actually
“Phase One” the brand is the product of “Team Phase One.” The “team” part refers to a collection of several entities which, in past times, were called Mamiya, Leaf, and Phase One. Now, those entities are all 100% Phase One owned and go by the names Phase One Japan, Phase One Japan, and Phase One Denmark. It also refers to Schneider-Kreuznach, their strategic partner for lens design.
If you add up all employees across all of these entities there are a total of ~325 employees. In addition to these “Phase One Corporate” employees the support, testing, and training of Phase One products is executed by a network of professional partners. Digital Transitions is the largest of these partners, at 25 full-time employees entirely dedicated to US users of Phase One. Along with DT, additional partners from all over the world this network add another couple hundred employees. It’s true that Phase One is small compared to megacorp conglomerates, like Sony (~128,400 employees in 2017) or Fuji (~77,700 employees). But notably, 100% of Phase One’s employees are in the business of high-end cameras, whereas Fujifilm, Sony, Canon, etc are companies with many products across many industries, of which high-end cameras are only a small sliver.
So Team Phase One is definitely not a huge company, but it’s also not nearly as small as you might think. Some of the impression of Phase One comes from how often high-rank R+D employees personally attend customer-facing events to gather real-world feedback. For example, Lau Nørgaard the Head of R+D, Niels Knudsen the Image Professor, and Ulf Liljegren, the Head of Worldwide Support will all be attending DT events in the coming month.
As Phase One has grown, year after year, they’ve maintained a surprising emphasis on top-level R+D staff taking such field-trips, workshops, and webinars. As a result they’ve engendered a very personal feel among their users. In a world where many camera companies are faceless megacorps, Phase One has maintained a small-company vibe.
Consistent Growth and Cross-Pollination
Regardless of the size of a company, its growth is frequently used as a metric of corporate health. And indeed, Phase One has been growing steadily for the last decade. That growth comes against a backdrop of a decade during which the overall worldwide market for digital cameras has sharply declined. By some measures the number of digital cameras (that aren’t phones) has plummeted as much as 80%, causing extreme stress on many traditional digital camera makers. They say a rising tide lifts all boats, so you might expect the opposite to hold true as well, but Phase One has not just held its ground; Phase One has significantly grown its sales. So where is this growth coming from? The answer is a little of everything: new geographies and new industries have contributed significantly alongside new segments and products in their core product line.
Over the past few years, Phase One and its network of professional partners have expanded their physical presence in previously underserved markets like India and China. For example, Phase One now has an office in Hong Kong. Partners are also getting on the road more often; in the United States the largest partner Digital Transitions now has offices in LA and NYC, staff in eight cities, and an IQ4 roadshow going to 10 cities. Finally, evaluations/testing and customer service are now frequently remotely done by Phase One partners using video conferencing, screen sharing, and email. Most other cameras are purchased from a big-box store which are rarely inclined to spend the time to provide such remote consultation. The new physical locations, greater emphasis on hosting local events, and the increased use of technology to provide personal service remotely, all contribute to growth by expanded geography.
New market segments are also contributing to Phase One’s growth. Aerial imaging for applications like mapping and agriculture are now a significant chunk of Phase One’s total business, served by the Phase One Industrial team (formerly Leaf) in Israel. In Cultural Heritage institutions like libraries, museums, and archives, Phase One is now the dominant way to digitize documents, books, film, and other collection materials adding millions in sales globally.
This diversified growth and business is great news for users, as it creates opportunities for cross-pollination. Many of the innovations in the IQ4 have been ported from Phase One’s industrial unit. For example, Ethernet was first incubated in Phase One’s industrial multi-camera fixed-wing aerial solutions where images are continuously captured at the maximum frame rate for hours at a time and a rock-solid ultra-fast connection is mission critical.
A Targeted Market
Notably, Phase One has not grown by adding commodity or general-purpose cameras. It’s never been Phase One’s goal to grow by becoming a mass-market product; it’s just not in their blood. They see that market as crowded and already well served. When Canon and Nikon release a technologically-similar camera, a $100 difference in manufacturing cost can make or break that camera. That creates an environment in which R+D can’t select the better component or spend more time refining a certain tool, even when it would only require a slight increase in price. It also creates a churn, where the camera maker can’t spend as much time adding features to already-sold cameras (as Phase One has done with the XF and will do with the IQ4 Infinity Platform ) because their model is to sell volume.
Moreover, the commodity/general-purpose market is also very driven by consumers and box-moving stores, which means specmanship drives the majority of sales rather than actual total system performance. The majority of buyers of Sony, Canon, Nikon, Fuji, et al, don’t have any real personal or professional interest in photography; they see a dedicated (non phone) camera as a way to better snap pics of their child’s soccer game or birthday party than they can snap on their phone. That’s not to say that professionals don’t buy such cameras; they absolutely do, they are just the minority of such buyers. We also don’t mean to belittle consumers; wanting a camera better for soccer photos is a perfectly good and important reason to own a camera. But the overall casual relationship with the product they are buying, make consumers of general-purpose cameras far more likely to value (i.e. be willing to pay more for) a spec like megapixels than more involved specs such as color quality, lens rendering, total system sharpness, or flash sync speed. Such consumers are also more interested in tools like Scene Modes that take control (and therefore the burden of control) away from the user, rather than tools such as Focus Stacking, In-Camera Raw-based HDR, and wireless tethering.
This might read at first as elitist, but it’s not motivated by snobbery. The R+D team at Phase One are camera nerds, and their passion is making cameras that will be appreciated by people who appreciate good cameras (whether professional, serious enthusiasts or industrial/scientific users), rather than cameras that make photography more accessible to the general public. In short, Phase One’s engineers want to produce a camera that serves the world’s most demanding photographers, not prosumer cameras. Both are valuable goals. Society needs someone to make the power drill that a college student can buy at Home Depot for $15, but society also needs someone to make the professional drill that a journeyman can invest in and heavily use for years and years or the industrial-strength drill used on a mission-critical assembly line.
The Wisdom of Age
Phase One also benefits from the experience and wisdom of age. At first blush it might be strange to talk about Phase One as being a company with a rich and long history to draw on, after all Phase One was founded in 1993, making it just old enough to rent a car in the USA. 1993 was not the absolute beginning of digital cameras (the earliest more-or-less-digital camera was created in a lab in 1975!) but in 1993 digital photography was still a newborn learning to crawl. In these early years Phase One gained a considerable head-start on some of the foundational technologies of modern digital cameras and raw processing.
For example, Phase One patents from 1996 and 1998 describe “Image processing method and system” and “Method and system for processing images” related to the creation of Phase One’s raw processing software. That software, Lightphase Capture, was released in (1998) and is the far-distant ancestor to today’s Capture One v11.
Their early work in raw processing opened a wide gap in the quality and speed of Capture One as compared to other raw processing software available at the time. Remember, this was the late 90s and consumer raw processing software like Adobe Lightroom was still a decade away. So when Phase One saw the abysmal raw processing software that was shipping with the earliest small-format dSLRs it recognized it had a huge opportunity. The Canon 1D shipped in late 2001 and within a year Phase One added support for raw processing of Canon 1D raw files in Capture One, with one important caveat: while the software was (and always will be) free to use with raw files from Phase One cameras, you had to pay to use it with a Canon 1D. And many, many 1D users did in fact pay to use Capture One with their raw files; it was light years ahead of the software that Canon itself shipped with the camera. Over the ensuing years Phase One added support for literally hundreds of camera models from sixteen brands including Canon, Nikon, Sony, and even a few oddballs like Epson (yes, Epson made proish-quality cameras for a stint).
What has followed is a natural consequence of economics; using the revenue raised from clients using Capture One with their small-format camera, Phase One has been able to invest heavily in their software R+D. The result is that Capture One has become the industry standard for professional and high-end enthusiasts.
Phase One was also, at the time, a leader in scan backs. This meant, among other things, they had to build software that, in 1996, could already handle a 36-megapixel capture. To put that in perspective the 1996 Power Macintosh 9500 standard configuration was a 1-gigabyte hard drive with a whopping 16 MB of ram – that’s 16 megabytes, which translates to 0.016 gigabytes of ram. Just four years later Phase One released a 132-megapixel scanback, at which point Nikon was just shipping the 2.7 megapixel D1.
The scarcity of computer resources to handle massive files made Phase One’s software team get creative. The development of proxy-based editing, still a staple in Capture One 11 all these years later, came about as a requirement of having single captures that were several times larger than the total ram of a high-end computer. As a result, even today, if you open the raw file from a Phase One IQ4 150mp in Capture One you’ll notice that operations such as adjusting exposure, cropping, and rating are nearly as fast as when working with low-res small-format raw files.
Team Phase One was also out of the gate early with single-shot (non-scanning) digital cameras. In 1992 Leaf (now part of Phase One) brought the Leaf DCB1 (“The Brick”) to market with a four megapixel 40mm square sensor.
Phase One answered in 1996 with the LightPhase which featured a 6mp sensor while Nikon was still making hybrid Fuji-Nikon bodies (The “Nikon E2”) with a 1.3-megapixel sensor. That back introduced three of Phase One’s most important technologies: dark frame management, buffer speed, and raw compression. The LightPhase was the first public use of Phase One’s dark-frame technology which is still best-in-class as a result of the upgraded workflow introduced in the Phase One IQ4 150mp. It introduced the compression-before-transmission pipeline that ensures Phase One backs have remained faster than the competition when it comes to clearing the buffer after shooting many shots quickly (to the point where you may not be aware a P1 back has a buffer since it’s so rarely used). Finally, it used the first generation of Phase One’s IIQ raw-compression technology, ensuring that 16-bit raw files could be compressed with either no loss of quality (IIQ-L) or even more strongly compressed with very slight loss of quality (IIQ-S). The result shows in the Phase One IQ4 150mp raw file which is ~80MB MB in IIQ-S mode, much smaller than the comparatively bloated raw file from the lower resolution Hasselblad H6D-100c.
The lead that Team Phase One developed early has never been yielded. In terms of resolution, Team Phase One was the first to 39 megapixels, the first to 56 megapixels, the first to 60 megapixels, the only one to 80 megapixels, the first to introduce 100 megapixels, and is now the first to 150 megapixels. A key example is the P65+, which first shipped in 2008. In addition to being the first 60-megapixel camera, it was the first to use a full-frame 645 sensor, the first medium format camera to allow ISO3200, and was the fastest high-res system on the market despite being higher resolution than any other. The closest Hasselblad equivalent, the H4D-60, was announced in 2008 but didn’t actually ship until late 2010, giving Phase One years of uncontested sales (Phase One’s modern policy has been to only announce when they are nearly ready to ship; not all camera companies abide by that rule). The Phase One IQ180 repeated this experience launching in 2011 and having no direct competitor for the throne of medium format until Phase One itself unseated it in January 2016; Hasselblad was never able to ship an 80mp sensor version of its platform and so sat out five years of flagship competition. At each of these stages Phase One reinvested the profits from having the lead flagship product, expanding long-term R+D to ensure that lead would be maintained in the future. The bevy of industry-firsts in the Phase One IQ4 150mp owes much to these previous successes.
Phase One only started making cameras with its own brand name in 2008 but its experience with cameras and camera interfaces began the moment they began making the 1996 LightPhase. The LightPhase was made to be compatible with a variety of camera bodies including models from Hasselblad, Horseman, Fuji, Linhoff, Mamiya, Sinar, Toyo. Later models introduced explicit support for a variety of other bodies. In each case, Phase One learned about tolerances, shutter behavior (especially in regards to timing accuracy), and machining methods. Developing a triggering and control protocol that could interface with a variety of different bodies, none of which were designed with digital capture in mind, made Phase One an early expert in digital interface protocols.
In fact, when Hasselblad decided to make a new digital-era body, they asked Phase One to help create the digital protocol it would use. The result of this collaboration was the foundation of the Hasselblad H platform, starting with the H1 body released in 2002 (and implemented in the Phase One H101 back for the H platform that same year), and still kicking around in the H6X today. While Hasselblad focused on the H platform Phase One supported the Mamiya 645, Contax 645, and Hasselblad H communication protocols as well as the Rollei 6008 protocol (with the Phase One DB20 back). In each case it found pros and cons in the interface protocol.
Phase One benefited from that experience when it developed the protocol used in the Phase One XF platform. Because the XF was developed from the ground up in the modern era it has the underlying improvements commensurate with general technological progress made in the 13 years since the Hasselblad H protocols were developed. This modernity is manifest in the many updates it has received over it’s life thus far, as well as the long list of XF features, many of which no other camera body has. These features include automatically calculated focus stacking, built in wireless triggering, control, and TTL of Profoto Air lighting, flash duration meter, 1-million-pixel CMOS autofocus sensor, 1/1600th native leaf-shutter flash sync, Autofocus Recompose mode, built-in focus micro adjust/calibration, time lapse and bracketing modes that integrate with Capture One metadata filtering, vibration monitoring and delay and more.
Summary: Experience, Funding, and Focus
Phase One has been a profitable and growing company over its entire history (with the exception of the first year of the Great Recession). Its early successes provided intellectual property and institutional expertise. It has released a consistent stream of successful products targeted at a clearly defined market, and with each success, it has reinvested the resulting profit into long-term R+D. The result is that Phase One has led the industry at every step, developing technology years ahead of its competition.
The IQ4 is just the latest instance of a long history of innovation leadership.