Computer scanners came into their own in the 1990's, and although the advent of digital capture devices has diminished the need for their services, they remain popular---even after a surprisingly long history. Scanners continue to evolve, currently offering high resolution output at a fraction of the cost and size of their progenitors.
History
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Scanners owe their existence to the concept of telephotography, a technology based on telegraphs, only instead of simple text, entire images can be transmitted. The principle method involved radio or phone signals using different intensities to depict various tones and colors, gradually forming an image.
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Telephotography became normative in the early 20th century, and by the 1920's Western Union and other service providers had telephotographers in-house at many locations.
Function
Due to bandwidth limitations over simple wires, the resolution furnished by telephotographers left much to be desired. Also, the equipment used in early telephotography took up considerable space and came with hefty energy consumption requirements. They were all drum scanners, since compact flatbeds were still a pipe-dream. These limitations led to innovation in the field, forming the basis for modern fax machines and scanners---two related technologies.
Time Frame
Telephotography remained in use until 1990's, with one of the first working solutions offered by inventor Edouard Belin in 1913. Belin began working on the technology circa 1905. Modern scanners entered the market in the 1980's, although resolutions (measured in dots per inch, or DPI) remained low until the late 1990's. This meant "what you see is what you get" scanning wasn't possible, as scanners lost much of the image in processing.
Types
Sheet-fed scanners, due to simplified optics, were among earlier solutions to become mass-produced. Microtek introduced the first model capable of 300 DPI in 1985---a black and white device.
Flatbed scanners, with more complex mechanics and capabilities, were later in coming to consumers. Companies such as Acer, Microtek and HP began offering models in the late 1980's, although hi-res (600 DPI or more), color versions didn't become popular until the mid 1990's.
Older readers may remember hand scanners, portable devices inspired by barcode readers that offered basic scanning on a budget. Inaccurate and low-res, they were popular as a stopgap in the early 1990's, then vanished from the market.
Significance
Home-users required scanners until the arrival of digital cameras---people used to scan photos for storage on a PC or for emailing. Digital devices have eliminated the need for this, and cheap all-in-one printers/fax machines mean less demand for document scanning. Currently, scanners remain useful to commercial entities---mainly in publishing.
Fun Fact
One of the most famous scanned images in history belongs to Russell Kirsch, an engineer working on scanning technology in the 1950's. A picture of his son was among the first photorealistic images ever transmitted, and it remains well known today.