Eyesquad’s proprietary lens design and image processing technologies make it possible for all objects from 10 cm. to infinity to be brought into focus automatically and simultaneously.

It may not be too far off in the future when world-class photographers like Annie Leibowitz are able to take their amazingly vivid pictures with cell phone cameras. That’s because thanks to Israeli technology, the quality of those tiny cameras will soon be so advanced, you may not be able to tell if it’s a Minolta long lens professional camera or a Samsung cell phone.

Tessera, a leading US provider of miniaturization technologies for the electronics industry that is developing such cell phone camera technology, has just purchased Israeli technology firm Eyesquad, a developer of micro-imaging products, adding the last piece to its development puzzle.

The $18 million buy-out is the second purchase of an Israeli company in less than two years. In December 2005, Tessera bought Israeli developer of wafer level packaging technologies Shellcase for $33 million, and last year, it purchased North Carolina-based micro optics company Digital Optics (DO). Together these three companies provide Tessera with the technology it needs to achieve its goal.

Eyesquad’s technology allows cellular phones with cameras to provide features found today only in digital cameras, such as high quality images, optical zoom, automatic focus and close up images – without changing the lens of the cell phone camera. Its advanced technology automatically brings objects into focus without the use of moving parts.

According to camera trade magazine Electronics Weekly, Tessera has caused a stir in the camera phone market by acquiring Eyesquad. And for good reason.

“Eyesquad’s proprietary lens design and image processing technologies make it possible for all objects from 10 cm. to infinity to be brought into focus automatically and simultaneously,” said Bruce McWilliams, Tessera’s chairman and CEO.

And that means that future Annie Leibowitzes will have it that much easier in capturing high quality images spontaneously as they happen, even if their regular camera isn’t with them. And the absence of moving parts means the technique can provide size, cost, reliability and power advantages over existing mechanical technologies for focus and zoom.

“This is particularly important for small form factor, high volume electronics such as camera phones,” said McWilliams.

A research company called Techno Systems Research, reports that 600 million cameras were shipped in mobile phones in 2006. And estimates show that this number will grow to a one billion unit market by 2010.

“It’s a very big business, and the trend is clearly towards a more miniaturized camera, with higher performance and lower cost. Our previous acquisitions of Shellcase and DO will enable us to address that trend worldwide,” Tessera Israel President Shlomo Oren told ISRAEL21c.

According to Oren, Tessera plans to utilize the unique technologies of the three companies it has acquired to provide image sensor and camera module manufacturers with a low cost camera module that includes advanced auto-focus and optical zoom, wafer level packaging, and wafer-level optics.

The final piece of the puzzle, he emphasized, is Eyesquad – a Tel Aviv startup founded only a year ago by Professor David Mendlovic from Tel Aviv University, Gal Shabtay and David Gasul.

“The combination of these three companies (Shellcase, DO, and Eyesquad) will enable Tessera to bring to the consumer market a very advanced, low cost, high performance camera with the capabilities of advanced digital photography – something the market is really looking for. Over the years, we’ve developed technologies ahead of market needs and we were ready when the market needed them,” said Oren.

Once Tessera’s acquisition is completed, Eyesquad will become a wholly-owned subsidiary of Tessera and will be integrated with the Tessera Israel operations, explained Oren. Tessera will sell Eyesquad’s technology to makers of sensors, lenses and digital cameras, and will earn royalties from licensing the technology.

“We’re going to hire additional employees to bolster their 15-person staff and strengthen their R&D site in Tel Aviv, with the goal of taking to the market as soon as possible a product developed by this talented group of people,” he said.

Oren, who was the CEO of Shellcase before it was acquired by Tessera, said it’s natural for the American parent company to be looking at Israeli technologies to achieve their goals.

“It’s our corporate policy to look for new technologies regardless of their location. I don’t need to tell you how developed Israel is, we simply looked at what fit our business model and what fit our needs to make our aggressive plan happen, and the fact that we found those technologies in Israel is not a big surprise,” he said.

Even the specter of conflict in the region didn’t deter Tessera, he added.

“We didn’t hesitate for a second to make the acquisitions here, it was based solely on the good people and the good technology. In between the Shellcase acquisition and the Eyesquad one, we had a rather unpleasant war in Lebanon, but regardless, we moved forward,” he said.

Attempting to integrate Tessera’s American staff with a new staff in North Carolina at DO and the two Israeli acquisitions might seem to be a daunting task. But Oren said the underlying factor that has kept things running smoothly – despite the vast time differences and equally wider cultural gaps – has been mutual respect.

“It’s surprising, but there have not been any major issues. We’re really operating as one single company with mutual respect in a relatively short time between the three sides, and soon to be the four sides. There’s a mutual understanding of the differences in culture, and everybody’s very patient and committed to making it work,” he said.

With that philosophy, Oren is confident that Tessera’s camera technology for cell phones will be available on the market before the end of the year. And as far as he knows, the only competition out there is from… guess what? Two Israeli companies.

“There is some competition, a compliment to the concept of the Israeli innovator, from two other Israeli companies doing the same thing. The benefit we bring is our integrated solution – we have the packaging, the image sensor and optics – and now we have the auto focus and the zoom – all the elements needed to make a complete solution.”