Kodak and Intel are joining forces to bridge technology and pricing gaps that currently separate consumers from access to high-quality digital photography processes.

In the process, they hope to create new "killer apps" (applications) to breed new computer users.The photo and computer chip giants announced in New York on Monday their plans to test market a digital photo product derived from traditional film cameras and develop a new generation of Intel-based digital cameras.

A $150 million marketing campaign to promote the commercial use of new technology is also part of the partnership.

Preannouncement trials of the partnership's new Kodak Picture CD product have been under way for two weeks in wholesale photofinishing labs in Salt Lake City and Indianapolis, Intel said.

"Kodak has always viewed digitization and digital imaging as significant growth opportunities," said George M.C. Fisher, Kodak's chairman and chief executive officer. "Products such as those we are developing with Intel will fuel our growth by providing consumers with exciting new ways to use their pictures."

"The bottom line is that we want images on PCs to become as easy to use and as ubiquitous as text is today," said Craig Barrett, Intel's president and chief executive officer. "If digital imaging is easy, affordable and fun for consumers, we believe it will spur PC demand and contribute to the ultimate goal of creating new users and new uses for the PC platform," Barrett said.

The strategy is to create digital images from film during the traditional photo processing routine familiar to consumers with the digital images copied on a Kodak Picture CD. Built-in software on the CD-ROM allows the photo images to be viewed and manipulated on a personal computer.

A four-month consumer market test of Kodak Picture CD begins Oct. 5 in several areas, with Kodak and Intel expecting to offer the digital option nationally in early 1999.

The two companies are installing new equipment to make the Picture CD in Kodak's Qualex photofinishing labs, which provide wholesale photofinishing services to thousands of retailers. The equipment includes dual Intel Pentium II microprocessor-based servers and a series of high-performance workstations, along with Kodak film scanners and CD writers. Similar equipment is also being offered to other wholesale photofinishers and film processing labs.

Kodak and Intel are also collaborating on products and platforms for digital still cameras, using a broad patent cross-licensing agreement. The goal is to create high-performance, low-cost digital cameras based on Intel imaging solutions.

"Imagine if your palm PC could scan a credit card," Fisher said, "and could simultaneously take your picture and imprint it on the card for verification at the checkout counter or if you could `see' everyone in an electronic chat room, easily and inexpensively, . . . if you could attach a set of `smart eyeballs' to consumer products, and turn them into machines that see. These are the kinds of `killer apps' our emerging joint technologies could help define."

The companies also unveiled a new joint logo with the tagline, "Cool Technology. Warm Moments." They will use this icon to promote their relationship to trade and business audiences. Intel will also be testing a new brand for potential use in upcoming imaging-related products.