‘The best camera is the camera you have with you,” observes Andrew Erlichson, CEO of Phanfare, a photo storage and sharing company that has recently moved from Metuchen to Nassau Street. This best camera then would be what is now nominally called a phone — or more particularly a smartphone. Phanfare, a five-year-old company backed by more than $5 million in venture capital, started out by storing photos its customers uploaded from their cameras. But “we know what’s going on in the tech world,” says Erlichson. “We realized that photography is being disrupted by smartphones.”

So when Apple opened its App store along with the release of its second generation iPhone last July, Phanfare was ready. Its product, Photon, was one of the first Apps. Back then, all of nine months ago, there were fewer than 500 Apps. There are now something like 33,000 Apps, and as Apple’s App store prepares for the hoopla that will accompany its 1 billionth download, Photon remains among the most popular Apps, ranking among the top 25 in the photography category.

“About half of our business comes via the iPhone,” says Erlichson. “Mobile is very big for us.”

The iPhone has a built-in camera. Photon uses that hardware and adds its own enhanced software, which provides functions the built-in software does not, including image stabilization and a timer. But its main function is enabling iPhone photographers to automatically transport their pictures to the Internet. Open Photon, snap a picture, and it is stored on the iPhone, and simultaneously stored on the Phanfare website. There is no need to connect the phone to a computer, download the photos, and then export them. The process occurs without a single wire, and can occur miles from the nearest computer or Internet connection.

This easy upload is what has been missing as cameras have gone film-less and camera manufacturers have worked to integrate their products with the way most consumers use pictures. “We’ve created that next generation camera,” says Erlichson. This integrated ability to transport pictures from a camera to the Internet has been stumping camera manufacturers, he says. They are struggling to make the process easier, but few have figured out a way to make it seamless. Some, including Kodak, have docking stations that take the computer out of the upload equation. Others include software that lets users hold a camera near an Internet-connected computer and press a button that uploads the photos without wires. But up to this point, there are few options for uploading to a photo storage website while on the go.

Doug Dixon, a Princeton area technologist who blogs at www.manifest-tech.com and writes for U.S. 1 Newspaper, does name one camera that allows users to upload on the go without wires. It’s the Sony DSC G3 Cyber-shot. At nearly $500, it is a fairly pricey option. Dixon also points out that it is possible to buy an SD memory card with built-in Wi-Fi. Called the Eye-Fi, it sells for about $80 and can be used with most digital cameras.

But it is very early days in the camera-as-connected-computer business. Meanwhile, there is Photon, and it has some nifty features.

I just used Photon to take a picture of a giant leaf that my five-year-old neighbor Ceci gave me. When I open Photon, I see the photo along with the date it was taken. Under the photo there are little icons that let me post it instantly to my Facebook account or E-mail it to a friend.

Photon also lets me purchase a print of the photo. Photon is the only iPhone App that lets users purchase right from the phone. This feature is missing from the iPhone itself, and also, somewhat surprisingly, is missing from the Kodak Gallery App.

The Photon photo upload does seem to take a long time. For my second shot I took a picture of the photos on my office wall and timed the upload. It took 1 minute and 48 seconds over AT&T phone lines. It may have been faster had I been in a WiFi zone. In any case, Erlichson says that his company will soon release an enhanced uploader that will cut the time.

When I got to Phanfare’s website seconds after taking the shots, they were already there, and I was given lots of options for using them. I can post them to Flickr, the popular photo sharing website, crop and edit them with software from Picnik, a Phanfare partner, create a slideshow, or buy prints, photo books, cards, or DVDs of my photo albums. But most importantly, says Erlichson, I can have the peace of mind of knowing that the photos are safely stored.

The App is free and so are all of the services that Phanfare offers — except for making and mailing prints and other physical products. But there is a limit. Customers who use the website at no charge can store 1 gigabyte worth of photos free. For unlimited storage, the membership fee is $54.95 a year, but only $27.44 for iPhone or iTouch owners who have downloaded the company’s Photon App. In addition to unlimited storage, membership entitles users to substantial discounts. Four-by-six prints, for example, are normally 12 cents apiece, but members get them for just 8 cents. The 30-percent-off discount for members applies to all of the products that the website sells.

Many Apps are priced at the nominal amount of 99 cents, while $2.99 and 4.99 are other popular price points. Why didn’t Erlichson charge for his Photon App? “It would just be friction,” he says. “We don’t want to slow everyone down.” His company’s business model relies on membership fees. A free way into its website from iPhones, which are proving to be phenomenally popular devices, is potentially worth much more than a small charge for an App.

Erlichson is passionate about the need for consumers to pay for Internet services that offer value. “Most services cannot be free,” he insists. In the case of photographs, he says that there is great value in safe storage. “You have a choice,” he says. “You can store photographs on your computer, and when it crashes you can lose them, or you can store them online.”

Storing photos and videos online costs money. “Online storage is not the same as disks,” says Erlichson. “It’s replicated two or three times. It’s people, real estate, cooling. A disk is one-third of the cost. I can buy a disk from Best Buy for $20, but what do you do with it? It’s more than buying the aircraft. You have to fly it.

“Kodak has shown that the model of unlimited free storage doesn’t work,” he says. “They have to make money. It was disingenuous of them to tell customers it was free. Now they have to charge their customers, and they feel betrayed.”

Just before I spoke with Erlichson, I went to the Kodak Gallery, where I have been storing my photos for many years. It contains my older son’s wedding pictures — the only ones I have, as he has not yet gotten around to making prints for us — the photos we took from the restaurant on the top floor of the World Trade Center on Memorial Day, 2001, and many more irretrievable photos.

I was shocked when, on my random visit to the Kodak site, I saw a notice telling me that I had something like 10 days to buy $4.99 worth of prints, or all of my pictures would be deleted. My sons each had a similar message, and none of us recall receiving an E-mail warning us of the impending loss of what Erlichson calls our “personal media.” The loss would have been huge.

Now I may well transfer my photo albums to Phanfare. But, I ask Erlichson, how can I know that he will keep them safe? For one thing, he says, membership creates a relationship. Everyone who signs up knows where his company is located. Everyone has his phone number. Customers may also draw comfort from the fact that his firm has attracted a substantial amount of venture capital.

Phanfare, an eight-person company, also draws on the track record of its founders, Erlichson, and Mark Heinrich, a Stanford graduate who is the associate director of the school of electrical engineering and computer science at the University of Central Florida. He works from his home in Celebration, Florida, Disney’s planned residential community.

Erlichson, who studied engineering science at Dartmouth (Class of 1989), met his partner while he was studying for a Ph.D. at Stanford. He worked first for BlackRock and then for a start-up that was acquired by DoubleClick, one of the largest Internet ad agencies. Board members include Dwight Merriman, co-founder of DoubleClick, Fabrice Grinda, the founder and CEO of Zingy, the largest mobile media company in the U.S., and Paul Ferris, the founding general partner of Azure.

A Princeton resident, Erlichson grew up in New York City, where his father was a professor of physics at City University and his mother was a math teacher.

SmugMug is one of his company’s major competitors, says Erlichson. “What happens next? Is 10 percent or 70 percent of the camera market going to the smartphone? Will cameras, which after all are computers, have access to public networks?” Erlichson wonders.

“Amazon’s Kindle has access to public networks,” Erlichson points out, wondering if and when that will happen for cameras. Amazon bundles the cost of using those networks into its electronic reading device. Will camera manufacturers be able to do the same? Or will users be asked to pay a small fee, maybe five cents, to upload a photo? This could work the way text messaging now works, he suggests. “Any month you use the camera, you will pay a little more on a cell phone bill.”

The future is not yet in sharp focus, but Erlichson is confident that Phanfare has been wise to connect with the smartphone market. The company is adding 400,000 users a month, 350,000 of them regular users, although he will not disclose how many have signed up for a membership. “We’re growing well,” he says.

For now, the smartphone camera is only the best camera in the sense that it is always inches away. But even that will surely change. Apple’s third generation iPhone, which will probably be released within a few months, is rumored to include a video camera and a vastly improved point and shoot camera. Other phone manufacturers are scrambling to catch up, and some have already released features Apple does not yet have, including zooms. These changes should only improve Phanfare’s profit picture.

Phanfare, 84 Nassau Street, Princeton 08542; 732-494-9449. Andrew Erlichson, CEO. www.phanfare.com.

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