In 2007, the DSLR market grew by 40% compared to the point-and-shoot market, which grew by 24%. As growth in the compact camera market has slowed, vendors have looked to DSLRs to provide additional revenue streams. DSLR market growth is driven by lower prices, easy-to-use technology, and increased model availability.

"Consumers who are upgrading to DSLRs are no longer just hobbyists, but also include families with young children who are looking for cameras with no shutter lag. A profitable DSLR market is able to support research and development (R&D), and we expect innovation in DSLRs that may cause consumers to regularly upgrade their camera body," commented Mette Eriksen, Director of InfoTrends' Digital Photography Trends Service. "2008 and 2009 will be critical years for the players in the DSLR market who are looking to hook in first-time DSLR buyers to their system of lenses."

Although DSLRs are feature packed, vendors are increasingly striving to incorporate the simplicity of compact cameras. The DSLRs of tomorrow are expected to more closely mimic some of the functionality of point-and-shoot cameras. Automated features common in compact cameras, such as red eye removal and face detection, will make their way into DSLRs as live view becomes standard. This may also be the year that video capture becomes possible in cameras with interchangeable lenses.

These features appeal to new DSLR segments like parents with young children and consumers who enjoy taking quality photographs but aren't particularly interested in the technology. In essence, entry-level DSLRs will become fancy point-and-shoot cameras with interchangeable lenses during 2008.