Kodak's PalmPix camera, top, and photo printer, center, developed with Lexmark,
and a Xerox color printer, above, now compete in the same market.

Eastman Kodak has slapped its name on a Lexmark inkjet printer. Hewlett-Packard
now markets digital cameras. Xerox is introducing a self-service kiosk to
incorporate photographs into documents even as Polaroid bets its future on
wireless printers.

What is going on?

A hybrid industry is being born, fed by the widespread use of color in
documents, the ease with which people can download image-laden documents from
the Web, and the rising use of scanners, digital cameras and software that let
people route photographs to printers and copiers. "What is it that you print
from the Internet ? a text document with pictures, or a picture surrounded by
text?" asked Edward Y. Lee, a photography analyst at Lyra Research. "That
division just isn't cut and dried anymore."

Thanks to digital technologies, the lines are rapidly blurring between
industries that deal in words and those that deal in images. Digital cameras are
usurping a growing part of the market for film, and e-mail and other
technologies are cutting into the markets for text on paper.

"All the companies have to position themselves in the transmission and
communication end of the business," Jonathan Rosenzweig, an analyst with Salomon
Smith Barney, said.

That certainly was the motivation Eastman Kodak had when it put Patricia F.
Russo, formerly of Lucent Technologies, into its No. 2 spot last week. It was
why Hewlett-Packard plucked Carleton S. Fiorina, its chief executive, from
Lucent in 1999, and why the Xerox Corporation grabbed G. Richard Thoman from
I.B.M. in 1997 (although he was ousted last May, just 13 months after becoming
chief executive).

And those are just the high-profile hires. Nearly all the imaging companies
have been peppering their staffs with people steeped in the ways of capturing,
massaging, transmitting and using data.

Nor is this the first reshuffling. In the mid-90's, the advent of scanners,
which let printers function like copiers, and of digital copiers, which could be
hooked into computer networks and double as printers, erased the lines between
copiers and printers. Printer giants like Hewlett-Packard and copier kings like
Xerox moved from parallel players to fierce competitors.

And now, photography and document-processing companies are all selling
photo-capable printers, and are all offering products that combine pictures and
text. In effect, they are treating photographs, graphics and text as the same
product.

"It's no longer just Kodak against Fuji and Agfa, or Xerox against
Hewlett-Packard," said Andrew Johnson, who follows digital photography for the
research firm Gartner. "It's Kodak competing against Xerox, and Kodak both
partnering and competing with H. P."

Imaging companies readily acknowledge the free-for-all. "The document-processing
companies are moving into photography's consumer markets, the photography
companies are going after document-processing's office customers, and everyone
is chasing the people who want wireless printing technologies when they're on
the road," Sandra B. Lawrence, chief marketing officer for the Polaroid
Corporation, said.

The competition is heady, but the winners will win big. "Yes, we are competing
with more companies, but it's like going from having 50 percent of a $10
industry to having 1 percent of a multibillion-dollar industry," Manny Almeida,
a vice president of Fuji Photo Film U.S.A., said.

Kodak, which will report its quarterly earnings today, has already tried to
quantify the new industry. Last month it began an advertising campaign that
posited a $225 billion "infoimaging" industry, created by "the accelerated
convergence of image science and information technology." According to Kodak's
research, $65.6 billion of this new industry is taken up by printers, inks and
other items not part of Kodak's traditional product line.

"We share this $225 billion market with H. P. and Canon and Xerox and Lexmark
and many others, and none of us have more than an 8 percent share," said Carl E.
Gustin Jr., Kodak's chief marketing officer. "And that's good, because you don't
want to see a couple of companies grabbing 60 percent and choking off
innovation. This way, everyone will grow with the rising lake."

Web-based printers are rowing in those waters, too. For example, NowDocs Inc.,
which prints and distributes documents it receives electronically, has developed
software that lets it print multiple versions of picture-laden documents. It is
bidding for jobs to produce, say, automotive brochures that substitute pictures
of a car in a skiing area, a beach resort, or tooling through Midtown Manhattan,
depending on the target customer's location and interests.

The trend has already filtered to the retail level. Camera dealers now routinely
sell printers. Print and copy shops like Kinko's are installing photo kiosks,
while photo processors are offering copying services.

"Our camera and printing divisions are all working together now, because these
days, our customers are the same customers," said Jeffrey H. Taylor, business
development manager for Canon USA. His company has consolidated its consumer
printing and photography businesses under one chief, and is retraining its
salespeople and dealers to persuade corporate customers to buy suites of
equipment that include digital cameras, printers and color copiers.

In many ways, the imaging companies are late arrivals to a party that software
companies held for their customers years ago. "Even professional photographers
are mastering Adobe Photoshop," said Frank J. Romano, a professor of digital
publishing at the Rochester Institute of Technology. "Photography is digital
now. Period."

In fact, software packages now help visually oriented people check spelling and
find the right words, and help the wordsmiths digitally paste pictures into a
visually pleasing document.

"The software suites have broken down the boundaries between what were once
separate crafts," said Peter A. Crean, a senior fellow at Xerox who specializes
in digital imaging.

Real estate agents, insurance appraisers, doctors and all kinds of professionals
who once stapled photographs to documents are now printing those photographs as
part of the document. Consumers who once clipped snapshots to letters now
routinely incorporate their images onto thank-you cards and invitations, and
into family newsletters.

Words and Pictures Are Combined to Form a New Industry

"Image manipulation is the common ground on which all of the imaging companies
meet," said Jack L. Kelly, an analyst at Goldman, Sachs.

Nonetheless, the document-processing and photography companies bring different
strengths. The document companies offer high-speed volume production; the photo
companies still have an edge on quality and durability of pictures.

And they have different customer bases. Kodak and Fuji already have large
networks of retailers that use their photofinishing services, as well as kiosks
that let consumers make prints from snapshots, negatives or, increasingly,
digital camera disks. They now want customers to store their photos in digital
form on their Web sites, and to incorporate them into glossy brochures, photo
albums or other text-plus-picture documents that when printed require expensive
inks and papers.

The document-processing companies have large installed bases of printers and
copiers, and want to persuade existing customers to use the machines to print
pictures ? thus also using more expensive color inks and coated papers.

Xerox; Epson, which is part of Seiko Epson; and soon, possibly, Ricoh also have
photo kiosks built around copiers or inkjet printers. These kiosks rarely yield
the highest-quality photographs. But analysts note that real estate agents do
not need an album-worthy picture of a house, and few consumers care if their gag
cards show the sharpest photo on the most durable paper.

Moreover, color copying and printing technology keeps improving. Several
companies have developed expensive color machines that are so fast they can be
used by publishers to print color covers for books, or by large companies to
create huge quantities of sales brochures.

"Chief financial officers are finally saying, `O.K., you can buy that expensive
color printer and do your marketing presentations in-house,' " said Ron Potesky,
a marketing director for the Ricoh Corporation, the American subsidiary of the
Ricoh Company of Japan.

Perhaps inevitably, document-processing and photography companies are looking
for ways to capitalize on each other's strengths even as they compete for each
other's turf.

For example, Kodak cobranded a printer with Lexmark International and then
joined Hewlett-Packard to form Phogenix Imaging, a venture to market a
photofinishing device based around digital inkjet technology.

Xerox's photo-capable kiosk, called Pixography, is built around a color copier
that was developed by FujiXerox, Xerox's joint venture with Fuji Photo Film.
Xerox has exclusive rights to sell the copier in the United States; Fuji's
American arm is buying the copiers from Xerox to use in its Frontier minilabs.
The beefed-up Frontier system will let photo processors print digital
photographs onto greeting cards and other documents ? exactly the type of
applications Xerox is hoping that copy shops like Kinko's will buy Pixography
for.

Companies are looking outside the imaging industry for partners, too. Kodak
recently joined forces with Homestore.com Inc., an Internet-based real estate
listings company, to get access to real estate agents who want to print out
pictures of houses. Kodak and Lockheed Martin are co-marketing systems to store
and retrieve digital or paper records.

"Companies with customers are aligning with companies with technologies," said
Mr. Rosenzweig, the Salomon Smith Barney analyst.

More partnerships are likely to spring up soon. Polaroid, for one, will soon
introduce a digital paper that traveling sales representatives can use to
download sales brochures and the like from a company's intranet. But it will
need a special printer, and Ms. Lawrence, the marketing officer, said the
company would probably seek a partner to make it.

She expects Polaroid to seek out partners for other applications as well. "I
could easily imagine us partnering with a Ricoh or a Xerox or someone else whose
strength is retrieving visuals for documents," she said. "The synergies in our
industries are just so extreme."