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I wouldn't exactly call the 110 system a failure, in fact you can get some really good images out of it and it was quite popular (according to my parents nearly everyone they knew in the 70's owned or used a Kodak 110 Instamatic for their family snaps). Plus you could get some quite high end cameras: the little Pentax Auto 110 was truly a tiny (world's smallest) SLR with interchangable lenses, motordrive, teleconverters, the works (I have one that I use for a bit of fun as it truely enjoyable to use).
Are you sure your not referring to the 'Disc' system as that was definitly bad. It had some good things going for it like being really small, easy to use etc, but the negatives were even more tiny, the 'disc' cartridges were expensive to manufacture, and the picture quality was further worsened by the simple fact that the labs were supposed to buy a new sort of printing lens for specifically for disc prints, but they found that they could actually print them using their usual lenses (but with a reduction in sharpness) which just made it even more unpopular with a reputation of poor quality (which was probably deserved!).
The 110 film was only the equivalent of 16 mm (13x17mm)
The 126 instamatic was far more popular and took pictures 28mm square.
However both systems used double ended cassettes that had trouble holding the film flat. Which was some what wasted on the better precision cameras that came out, in either format. so quality was always compromised.
I had a shop during this period and would sell at least a dozen 126 cameras on a Saturday. 110 cameras never sold that well and people complained about the print quality which was better than the "Disc" cameras (11x8mm) but not by much.
At least the disks did not have the same flatness problems as is was coated on the same base stock as 5"x4" film and always had the latest generation coatings.
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