BREA, Calif., Dec. 4 -- The worldwide office products business of Avery Dennison Corporation today announced that it has signed an agreement with Microsoft Corp. to co-brand and co-market a combined package of software and photo-quality printing paper products for the rapidly growing digital photography market. Avery Dennison's office products group will introduce a new line of co-branded Avery Digital Photo Paper products that is compatible with Microsoft Picture It! software, providing a complete, easy-to-use system enabling consumers to edit, format and print professional-looking digital photos on their personal computers and desktop printers. The digital photo paper features a new Avery Dennison technology that produces a digital photo print with clean, smooth edges. "We look forward to expanding our relationship with Microsoft, a company with which we have a long and successful history, to make it simple and convenient for consumers to use the latest technology to obtain great results from their personal computers and desktop printers," said Tim Clyde, group vice president of Avery Dennison Worldwide Office Products. "I am confident that the combined technological expertise that Microsoft and Avery Dennison bring to this new customer segment will provide easy-to-use solutions to enable consumers to edit and print their digital photos." "Microsoft is proud to be working with Avery Dennison to provide consumers with a complete solution for their digital photography needs," said Michelle Richardson, product manager for the Digital Imaging Group at Microsoft. "The combination of Microsoft's digital imaging products and Avery-brand photo paper makes it easy for users to create professional-quality photo memories." Avery Digital Photo Paper has been designed to provide high-quality photo printing on sheets that contain a variety of pre-determined photo sizes. Once the images are printed, a new, patented technology allows the individual photos to be easily and cleanly "snapped out" of the sheet, providing a crisp, clear image with smooth edges -- no perforations and no need for cutting. A complete line of Avery Digital Photo Paper products will be introduced in the United States, Canada and European markets during the first quarter of 2003. In the United States, packages of Avery Digital Photo Paper will contain Microsoft Picture It! Express software, which features easy-to-use templates for formatting and printing photos on Avery Digital Photo Paper. In addition, samples of Avery Digital Photo Paper will be included in packages of Microsoft's latest imaging product, Picture It! Digital Image Pro. Avery Digital Photo Paper and Microsoft Picture It! software are compatible with virtually any combination of leading personal computers and ink-jet printers. Used together, the products provide a significantly simplified process for editing and printing digital photos -- a critical need that consumers have identified since the emergence of digital photography. Digital photography is rapidly becoming the preferred format for consumers. According to InfoTrends, a leading market research firm in the home photography market, nearly 20 percent of U.S. households are expected to own a digital camera by year-end. Digital camera sales are expected to comprise approximately 28 percent of the worldwide camera market in 2002. In North America, an estimated 9.5 million digital cameras will be shipped in 2002, and by 2006, it is projected that more than half of all cameras sold will be digital. According to Lyra Research, retail sales of digital photo paper were estimated to be $250 million in 2001, and are projected to grow as digital camera sales increase. Avery Dennison and Microsoft have worked together for more than 15 years, simplifying technology and developing products for consumers that provide an easy-to-use process for formatting and printing office labels and other printable supplies.