FORTUNE -- When Ren Ng set out to remake photography with his innovative Lytro camera three years ago, he went both too far and not far enough.
Lytro introduced to consumers a whole new type of photography, called light field photography, which captures far more light data than traditional cameras. It didn't go far enough because its marquee feature -- the ability to refocus an image after it was shot -- while dazzling, seemed limited and a little gimmicky. Indeed, two years after Lytro released its camera, smartphone cameras have found ways to mimic the effect.
Where Lytro went too far is in trying to reinvent camera design. Unlike traditional point-and-shoot cameras, Lytro's was shaped like an elongated square block -- the New York Times compared it to a stick of butter -- with a touchscreen, which was too small, at one end and lens at the other.
As a result, the Lytro camera, which was introduced at $399 and up but later dropped in price, never lived up to the hype it received. The company won't release sales figures, a sure sign that it never got past a niche market of what it calls "creative pioneers."
As it tries again with a new camera, Lytro seems to be addressing both of its initial missteps.
For starters, the new camera, the Lytro Illum, looks like a camera -- more specifically, it looks like the kind of professional-grade digital single-lens reflex camera it is trying to compete with. Second, the Illum's software platform takes light field's technology several steps further than its predecessor. The Illum takes images that can be refocused, of course, but users can also shift perspective and tilt, and change the depth of field.
The Illum is aimed at professional or serious amateur photographers and will be available in July for $1,599. That's not cheap, but it's comparable to many dSLRs, especially considering that it's equipped with the equivalent of a 30mm-250mm telephoto lens.
"This is the camera I always wanted to build," says Ng, Lytro's founder. "This is the direction we always thought the technology would go."
Ng says the Illum, which has a light field sensor four times more powerful than the original Lytro camera, a constant f/2.0 aperture, and a high-speed mechanical shutter, will take sharper pictures than most professional cameras and will do particularly well with close-focus macro shots.
The Illum's zoom lens, which is not interchangeable, is much lighter than traditional lenses with similar range, giving the camera a total weight of about two pounds. Most of the controls are in a large touchscreen whose tilt can be adjusted. The camera's body, when viewed from the side, is shaped like a trapezoid, so that the touchscreen, rather than being vertical, is tilted by default, making it easier to use. The touchscreen is on a hinge, so it can be moved to different positions. The Illum also has a hot shoe that supports a flash.
It's impossible to know whether the Illum will deliver on its promise until the camera is available for testing. But Ng and Lytro's investors are betting that the photography pioneer is ripe for takeoff.
The company, which has about 85 employees, raised $40 million late last year from a group of marquee investors, including early backers like Andreessen Horowitz and Greylock Partners. Earlier in 2013, Andreessen Horowitz tapped one of its most trusted lieutenants, Jason Rosenthal, to be Lytro's CEO. Rosenthal had a long history of working with both Marc Andreessen and Ben Horowitz at companies like Netscape, Opsware, and Ning.
"This is a new category in photography," Rosenthal says about light field photography. The market for professional cameras, he says, is about $20 billion a year. "If all we did was take fractional market share, we'd be a big business."
Rosenthal rejects the notion that the original Lytro camera was a flop. He says sales exceeded projections "slightly" and that the camera introduced consumers to the concept of light field photography. It also helped to seed a market of suppliers who are willing to build components for Lytro.
He describes the Illum as "a huge step forward" from its predecessor, and as just one step on the path to enhancing and popularizing light field technology. "We'll do that again and again and again," he says.
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