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Canon, who have faced stiff competition from the Panasonic with their micro four thirds range of Lumix cameras, is set to throw the towel in and launch a new compact D SLR camera range.

Last night Masaya Maeda, head of Canon’s image communication products division, told Reuters that the company is working to bring its own compact competitor to market.
“There is a consumer need for good-quality cameras to be made smaller,” Maeda said. “We will meet this need.”
According to Reuters, Maeda also did not give specifics on how Canon will offer a small camera with D-SLR experience, but insiders are tipping that it will be achieved by following their competitors and removing the mirror box.
Maeda suggested that Canon will do things differently. He said:  “It’s not a question of whether or not you have a mirror,  but whether you can deliver cameras that are smaller and maintain image quality and speed”.
Reuters said that traditional D-SLRs require two image sensors: a large one for capturing images (larger equals better image quality) and a smaller one for executing auto-focus. Two sensors require a mirror box in order to mirror the image to both sensors, as well as a large body to house this system. D-SLRs rely on just the large image sensor to execute autofocus (and other tasks like simultaneously display an image on the LCD), but small and cost-effective processors are not powerful enough to keep up with the large amounts of data being delivered from the large image sensor, until recently.
The new miniature D-SLRs from Olympus, Panasonic, and Sony get rid of the mirror box and second image sensor. In their place are a faster processor, which works in conjunction with the large image sensor to simultaneously deliver images, autofocus, and a live view on the LCD.
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