MIT MicroFuel Cells said Wednesday it has signed a development agreement with an unnamed Japanese camera manufacturer.

As part of the two-year partnership, the companies will work to adapt MTI’s fuel-cell technology to various imaging applications, including digital cameras, according to the announcement, which adds that the companies also will evaluate the feasibility of bringing the technology to market and potentially produce products.

While MTI didn’t name its partner, it described the company as a developer of products that use advanced optical and digital technologies. CEO Peng Lim called the company a “household name” and a “certainly one of the leaders in the camera market.”

The news could be a sign that long-awaited fuel cells are moving closer to consumer electronics. If everything goes smoothly, Lim said, the agreement could lead to the commercialization of fuel-cell products for digital cameras in two years.

“Cameras are a logical [application] for fuel cells, because most of the time you use it you’re outdoors, so you cannot charge it, and a fuel-cell solution just fits in really well,” he said. “This partnership … validates the fuel-cell market opportunity. This also proves our Mobion technology is flexible enough that it can fit into more than one [manufacturer] and application.”

The camera market is attractive because it’s large and growing. Digital cameras are the third-largest consumer electronics category after cell phones and laptops, according to Frost & Sullivan, which forecasts that approximately 110 million new cameras will ship by 2009.

Fuel cells, which produce power by mixing fuel with air and water between a thin, reactive film membrane, are meant to fill the so-called "power gap” caused by increasingly power-hungry devices and traditional batteries’ failure to keep pace. And advocates say they are greener than batteries, some of which contain toxic heavy metals.

But while fuel-cell believers have touted the potential of these technologies for years, numerous challenges and delays have turned many former advocates into skeptics (see Fuel Cells Follies).

To mention a few of the hurdles, there's the high cost, a lack of the infrastructure needed to distribute the fuel and energy-density difficulties. Some companies also have run into durability problems at different temperatures, especially at small sizes, as well as manufacturing challenges, Lim said.

MTI thinks it has solved the technology challenges with its Mobion technology, which has a passive water-management system that removes the need for micro plumbing to route water from one side of the cell to the other, delivers higher-energy density than competitors’ cells.

The company also believes its partnerships will allow the company to avoid having to develop its own distribution chain, Lim said. “We have chosen not to do that, but instead to partner with others with long reach and distribution,” he said.

Aside from the camera partnership, MTI in 2006 partnered with Samsung Electronics to develop fuel cells for cell-phone applications, and renewed its agreement for two years in 2007 (see Samsung, MTI Micro Sign Deal).

The company also has a strategic alliance with The Gillette Co.’s Duracell (which included a $1 million investment) to develop a fuel-cell refill system and an agreement with Dupont to develop fuel cells for wireless electronic devices.

In January, MTI launched a pilot facility in Albany, N.Y., and the company is using the pilot plant to make its products easier to manufacture, Lim said.

MTI plans to reach “manufacturing readiness” this year, including selecting its manufacturing partner and beginning its tooling, and hopes to launch its first-generation products next year, he said.

Among the possibilities is a 25- to 30-watt-hour external charger that can recharge devices with mini USB ports, a charger that snaps onto the bottom of a digital camera and an embedded power source for a GPS device. The GPS fuel cell, which debuted at a conference earlier this month, is 15 percent larger than the original battery pack, but delivers three times the energy, Lim said.

While the prototypes are currently refilled with methanol from a bottle, Lim said the market versions will come with replaceable cartridges, which MTI plans to show in the second half of this year.

The company also has a “concept” prototype of a power source for the Samsung BlackJack, which is thicker than the Blackjack’s normal battery pack, but fits in the same slot. While it is a little bit larger and not yet ready for commercialization, the fuel-cell prototype already delivers up to twice the talk time, Lim said.

While MTI’s fuel cells will be more expensive than lithium-ions initially, Lim said he expects they will be competitive at higher volumes.

“Our vision in the long term is that every electronic device that uses a battery today will use a fuel cell," he said, "and that consumers will have the freedom that they don’t have to be attached to the wall."