Are Digital Camera Phones Too High-Tech?

Digital camera phones spark enterprise security concerns.

As camera phones become standard equipment for wireless providers, they are causing new problems for enterprise customers.

In the first half of this year, camera phones outsold stand-alone digital cameras, according to Boston consultancy Strategy Analytics Inc., which predicts camera phone sales will reach 65 million units for the whole year, or 13 percent of global handset sales. This is great news for consumers, who can buy camera phones for less than $100. Its a potential opportunity for carriers that garner revenue from photo messaging services. But it is a problem for enterprise customers for which cameras, especially tiny ones, pose a security threat.

"Theres a clear No cameras allowed posting at the entrance to our facility," said Dave Milkovich, advisory software engineer for the Global Combat Support System-Air Force project at Lockheed Martin Corp., in Owego, N.Y., and an eWEEK Corporate Partner. "That applies to any image-capturing device."

The breadth of the concern has surprised carriers, which are trying to do something about the fact that cameras are pretty much standard offerings in the high-end phones they market to enterprise customers.

"We were just assuming that if you wanted a high-end phone, youd want a camera on it, but thats not the case with the enterprise," said Cindy Patterson, vice president of enterprise sales at Verizon Wireless Inc., which runs prospective handset designs by a core board of Fortune 500 CIOs before deciding to sell them. "Fifty percent of the customers on our technology board said they couldnt have a phone with a camera," said Patterson, in San Diego.

The company has already worked with Samsung Electronics Co. Ltd. to create a version of Samsungs high-end i700 phone with a disabled camera for security-sensitive corporate customers. But a disabled camera remains a camera. "You could bring in a severely antiquated camera from 1920 that obviously doesnt work anymore, and they wouldnt let it in," Lockheed Martins Milkovich said. "Its still a camera. If you had a phone with a camera in it, theyd take it away from you and probably jump up and down on it."

To that end, Verizon Wireless is talking to handset providers about creating two SKUs of its high-end phones, one with a camera and one without, Patterson said.

Fellow Code Division Multiple Access carrier Sprint PCS Group is in early talks with Handspring Inc. regarding a cameraless version of the new Treo 600, a phone/ PDA largely aimed at the enterprise, said Sprint officials, in Overland Park, Kan., who met with Handspring officials last week to discuss the option. Handspring officials, in Mountain View, Calif., said the company may disable the camera through a software fix, but it is also eyeing a cameraless SKU.

Still, industry officials said it is financially painful to develop handsets that appeal to only one type of audience, especially since wireless data access is not yet ubiquitous as a corporate application in the United States.

"It costs $15 million at the least and usually $20 million to develop a phone," said Peter Bancroft, vice president of communications at Symbian Ltd., in London, which makes the operating system for most of the new high-end phones from Nokia Corp. and Sony Ericsson Mobile Communications AB, including the latter companys P900. Sony Ericsson officials, also in London, said theyve made the P900 suitable for the enterprise, citing corporate application development partnerships with IBM, Synchrologic Inc. and several other software companies, even though the P900 contains a still camera and a video recorder that can send video clips via Multimedia Messaging Service.

"In the device space, the handset manufacturers focus is to make a good consumer device," said Jim Gans, chief technology officer of the mobile multimedia services group at AT&T Wireless Inc., in Redmond, Wash., which markets heavily toward consumers with offerings such as voting for "American Idol" contestants via wireless. "But the conversations [about cameraless options] are happening."

Cingular Wireless officials said they are focusing on the enterprise with products from Research In Motion Ltd., which focuses heavily on corporate customers. "RIM has the right idea with their integrated phone," said Brian Keller, executive director of solutions engineering application development at Cingular, in Atlanta, referring to RIMs line of phone-enabled BlackBerry corporate e-mail access devices.

RIM officials said there are no immediate plans for a BlackBerry with a camera in it.