Hasselblad Electronic Imaging

The Swedish company Hasselblad became a camera legend when it was used in space during the 1960s.

The following photo of Edwin ”Buzz” Aldrin (no. 2 on the moon) and Victor Hasselblad – the founder of the company, was taken in Gothenburg, Sweden.

The Hasselblad system has been loved all over the world for its flexibility, superior performance and simplicity.

Headquartered in the industrial city Gothenburg, in the south west of Sweden, Hasselblad became a cult brand in the 1960s and 1970s.

Believe it or not – but though Hasselblad was an iconic camera, there were several concerns already in the 1980s.

The medium format segment of the industry faced declining revenues already in the 1980s.

A shrinking market may in the long run lead to increased price competition, and thus lower profits.

Maybe Hasselblad should try to diversify its business in order to grow?

In addition to this, the ’Mavica shock’ from Sony’s launch of a semi-digital camera in 1981 had put digital imaging on the agenda of all big players.

Even though the shift was far away, especially for high-end firms like Hasselblad, it would be unwise to completely ignore the new technology…

Hasselblad was a mechanical company, and it would be quite risky to have only a competence related to coggwheels the day when electronics transform the industry.

“Even though I did not believe in the Mavica concept, I was convinced that the photo chemical film would in the future be subject to serious competition from electronical photography and would eventually be substituted by this technology” //CEO Jerry Öster, 1991

”I met Sony’s CEO and the person behind the Mavica project. It soon became clear that the technology had so many shortcomings that it would not lead to any commercial success.” Jerry Öster, CEO

But at the same time – could a relatively small company like Hasselblad enter at this very early point and compete with such poor image quality with diluting its brand? Sounds risky.

Öster discussed the issue with the R&D Manager Lennart Stålfors (who was an electrical engineer). They both concluded that the Mavica was not the way forward for Hasseblad, but were still certain that digital imaging would become a serious threat in the future.

But what to do then?

Was it possible to learn more about digital imaging by developing applications and use this knowledge to develop cameras at a later point?

Stålfors and Hasselblad had been collaborating with the Space Division of SAAB for a few years.

The project concerned image analysis related to space and aircraft applications. The outcome of this was called OSIRIS, a scanner that could digitize images in order to send them.

However, the image quality was too poor and the price too high. OSIRIS did not become a success.

Based upon insights from this project, Stålfors recognized that the transmission of images via the phone line was underdeveloped.

Those photos which were sent had a significantly lower image quality when they arrived.

Thus, photographers had to use their dark rooms instead. In many applications, this time consumption was quite a big problem.

Could Hasselblad develop a digital tele-photo sender?

Such a product would be lighter and offer a superior image quality and thus, it was compatible with Hasselblad’s brand.

Jerry Öster thought this was a good idea and the development work was initiated.

The goal was to have a working prototype ready until the Olympic Games in Los Angeles 1984. The Swedish newspaper Expressen joined Hasselblad in this work.

After days and nights of hard work, two tele-photo scanners could eventually join Expressen’s photographers when they crossed the Atlantic ocean in order to cover the Olympic Games in LA.

It looked like this:

The ”Digiscan” became a great success!

When the other photographers were still queuing for the dark rooms, Expressen’s photographers pulled up the Digiscan and sent their photos home and they could be published much faster.

Since photo journalists from all around the world had gathered in LA, this was fantastic marketing for Hasselblad.

Back home in Gothenburg it was clear that Hasselblad had a great opportunity to create good revenues and more knowledge about digital imaging.

But how should it be done?

Digital Imaging and scanners were at this point very different businesses compared to the analogue camera work.

Maybe it was better to separate this from the company and give it an opportunity to grow on its own…

In 1985, the subsidiary HASSELBLAD ELECTRONIC IMAGING was born.

Take a good luck at the brand. The ’Hasselblad’ logo is combined with a different font for ’Electronic Imaging’. This was done in order to communicate that while this was a premium product, it was still different from Hasselblad’s traditional business.

Behind the Hasselblad building…

On the back…

There was a bridge over to another building…

Hasselblad Electronic Imaging (HEIAB) was put on the other side of this bridge, physically separated, yet still connected with the mother company.

Lennart Stålfors became the CEO of HEIAB and brought a few engineers from the mother company.

The Board of HEIAB was comprised of Stålfors and some people from management, the CFO Bengt Ahlgren (second to the left) and CEO Jerry Öster (third to the right).

At this point, HEIAB only had a prototype and there were still doubts about the future success of this initiative.

Many people at the company wondered why Hasselblad should do something like this, which was outside the core competence of the company.

HEIAB started off as something very small, with small resources.

But they had:

A fantastic brand.

A prototype with great potential.

And some highly entrepreneurial and very skilled electronic engineers.

The Digiscan prototype was developed further into what became the Dixel.

It looked like this:

This is an image that has been digitized with the Dixel.

There was a great demand for the Dixel and HEIAB grew rapidly in the 1980s.

The Dixel became an integral part of the photo journalist’s equipment.

The company started to make good profits for Hasselblad already in 1988.

Merry Christmas and a Happy New Year (in Swedish)

Meet the team from 1988:

See the vacant (empty) positions? HEIAB was indeed expanding back in these days…

In 1989, 25 percent of Hasselblad’s profit came from HEIAB, an initiative that was only 4 years old.

This is a fantastic success!

HEIAB started to develop other applications for photo journalism such as images storage systems and image management software.

HEIAB kept doing very well through 1989-91.

However, Nikon launched a tele-photo sender in 1992 which was superior to the Dixel and thus killed tha flagship of HEIAB.

”1992 was a tough year. We were not able to continue the great expansion that was experienced up until 1991…”

This was the beginning of the end for HEIAB.

But the initiative was still a great accomplishment by Hasselblad.

Instead of throwing R&D at digital imaging without any commercial results, the company managed to create large profits while at the same time enhancing their knowledge about digital imaging.

Which were the success factors behind HEIAB?

1. They started out on a small scale with low expecations. This is absolutely necessary, because new things must by definition be small in the beginning. Big companies often ’think big’ and thereby miss out on small opportunities which become big later on.

2. Hasselblad dared to leave its comfort zone. Was the OSIRIS project a failure because it did not generate any revenues? No, it was actually here that the ’Dixel opportunity’ was discovered. Companies which only stick to their ’core competence’ will never find such possibilities.

3. The HEIAB people were the right guys for this. They were creators, not administrators of existing things.

4. While still leveraging upon the Hasselblad brand, HEIAB was very autonomous. No one except for the CEO could touch it, and thus HEIAB wasn’t starved in the daily internal competition for resources.

When the HEIAB business started to fade, most of the staff moved back into the mother company in order to develop digital cameras from 1993 and on.

But that’s a different story.

So, this was the story about how a company at one point succeeded in bridging the gap between the daily business and the future technological revolution.

Today, the bridge is gone and besides, Hasselblad has moved to another building.

When you know the history behind, images like this one can suddenly look like monuments.

Christian Sandström is a PhD student at Chalmers University of Technology in Gothenburg, Sweden. He writes and speaks about disruptive innovation and technological change. www.christiansandstrom.org christian.sandstrom@chalmers.se