HD Photo offers better image quality and greater compression than the Jpeg format currently used in most digital cameras, according to Microsoft, and will take up half the space of a comparable Jpeg file.
In addition to consumer electronics, the Jpeg format is commonly used on the internet.
"With HD Photo, we are taking a new approach to creating and editing photos that simply is not available to photographers with today's formats," said Amir Majidimehr, corporate vice president of Microsoft's consumer media technology group.
"HD Photo fully preserves the original image fidelity with high dynamic range while still allowing for significant improvement in compression size."
Adobe is working with Microsoft to create a plug-in for its Photoshop application that allows users to open and save the images. A beta version of the plug-in is currently available.
Although Jpeg 2000 resolves some of the technical challenges that faced earlier standards, the format is lacking browser support.
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