The popular but ageing JPEG has gained a new rival, Microsoft's HD Photo.

Microsoft will soon submit a new photo format to an international standards organization that it says offers higher quality images with better compression, the company said on Thursday.

The format, HD Photo -- recently renamed from Windows Media Photo -- is taking aim at the JPEG format, a 15-year-old technology still widely used in digital cameras and image applications.

Both formats take images and use compression to make the file sizes smaller so more photos can fit on a memory card. During compression, however, the quality of the photo tends to degrade.

Microsoft said HD Photo's lightweight algorithm causes less damage to photos during compression, with higher-quality images that are half the size of JPEG.

The format can also accommodate "lossless" and "lossy" compression, two methods of compressing photo data with different effects on image quality. Microsoft said adjustments can be made to colour balance and exposure settings that won't discard or truncate data that occurs with other bitmap formats.

Although JPEG is ageing, it has been modified to help keep it up to date. The latest JPEG 2000 format features better image quality while also supporting lossless and lossy compression. The original JPEG did only lossy.

Time will tell whether HD Photo can supplant JPEG by gaining the support of printer, camera and application vendors. But Microsoft is supporting the format in products such as its Vista and XP OSes and has already gained an important vendor ally.

In the next two months, Adobe Systems Inc. and Microsoft will release plug-ins for CS3 and CS2 versions of its widely used Photoshop program for Vista, XP and Apple's OS X. Also, Microsoft also has built a HD Photo Device Porting Kit so hardware manufacturers can support it.