A video camera nestling inside a transparent capsule just a few centimetres long has put Japanese imaging giant Olympus on the back foot. Launched in 2001 by Israeli start-up firm Given Imaging, the capsule is a wire-free endoscope that is simply swallowed by the patient.

Famed for its cameras, Tokyo-based Olympus is also the world's largest manufacturer of conventional endoscopes. But despite claims that it has been working on the idea since the 1990s, the company unveiled its version of the capsule endoscope in November 2004 — and the product has so far only received approval for sale in Europe.

Given Imaging's PillCam was described by its inventor, Israeli missile engineer Gavriel Iddan, in Nature back in 2000 (G. Iddan et al. Nature 405, 417; 200010.1038/35013140). It offers a significant advantage over wire endoscopes as it can provide images from the whole length of the small intestine — a notoriously long, convoluted and difficult part of the gut to image. It also largely eliminates the patient discomfort associated with conventional endoscopies.

As it passes through the digestive system, PillCam can send back pictures for up to eight hours, and doctors have found it useful for diagnosing problems such as small tumours and bleeding. Some 260,000 patients across 60 countries have already been examined with the disposable probe, its maker says.

Those numbers have been good for business. In the nine months up to September this year, PillCam's sales reached US$62.3 million worldwide, up 45.6% from the same period in 2004.

Left standing by the Israeli company, Olympus finally brought its capsule endoscope, called the Endo Capsule, to market in Europe this October. Clinical testing is still under way in the United States and Japan, and the company needs to receive full approval before it can begin selling its probe in these markets. Industry insiders add that Japanese firm RF System is developing similar products, but its looks as though it is still several years from the market.

Late launch: the Endo Capsule is coming to the market several years behind its competitor. Credit: YOSHIKAZU TSUNO/AFP/GETTY IMAGES

Olympus's late entry into the market highlights the fact that Japanese companies tend not to capitalize on their innovations quickly, say analysts. “Many large Japanese companies don't feel the importance of speed and timing,” says Yoko Ishikura, a specialist in corporate strategy at Hitotsubashi University in Tokyo. “They try to play a game on their own turf, and are slow to look outside.”

Iddan filed his first patent on PillCam in 1994 and helped to set up Yoqneam-based Given Imaging in 1998. The company now holds nearly 40 related patents. “PillCam has been so successful over the past five years that others cannot avoid trying to imitate it,” claims Yoram Ashery, one of the company's vice-presidents.

Katsuyoshi Sasagawa, deputy general manager of Olympus Medical Systems, claims that his company was looking at capsule endoscopes throughout the 1990s. But it was 2003 before it marshalled its expertise in digital cameras and endoscopy to create a competing device. Olympus plans to pitch the price of the Endo Capsule close to the US$450 charged by Given Imaging in the United States, and says it has been careful not to touch the smaller company's patent rights.

The Japanese company also claims that its product will have an edge thanks to its expertise in digital cameras, which should help it produce high-resolution images similar to those from conventional endoscopes. The PillCam currently uses slightly lower-quality imaging technology, but Given Imaging says it is working hard to improve this. As the competition between the two hots up, the struggle for supremacy could well go to a photo finish.