17th We had quite a lot of correspondence over the last few days, and interestingly much of it from different sources matched up. As such there are updates to just about every one of the rumours pages - see the rumours index for details. A very big thanks to all the sources!
First the 5D2...
 
As mentioned before, the 5D2 feature set is decided upon.
 
The 5D Mark II name is not yet finalised but likely
 
It could be launched as soon as November 2007 to 'take the edge off' D300 availability – otherwise it will be January 2008 for PMA.
 
It's best thought of as a '1Ds III lite' (in the same way as the 40D is a '1D III lite')
 
Specs:
 
    * DIGIC III
    * 14 bit RAW
    * 16 MP sensor using the same technology as the 1D III
    * 3 inch screen, live view etc.
    * Body very similar to the 40D except for different pentaprism / viewfinder etc.
    * Upgraded AF (like the 40D but with assist points)
    * Limited weather sealing etc. (like the 40D)
    * Still not a sports camera – it will be 4 or 5 fps.
    * Same firmware features as 40D (highlight tone priority etc.)
    * Image quality beats the current 1Ds II
    * Pricing still being finalised. Will be 'a bit more than the D300'
 
Note - this suggest to me that although Canon have a solution for using EF-S lenses on a FF body, we probably won't see it with the 5D2
The DSLR market
 
    * Note this is aggregated from what we were led to believe were Canon 'internal' opinions, from a number of sources.
 
The whole DSLR market has exploded over the last 2 years:
 
39% growth in 2006 to ~5.3 million cameras worldwide of which Canon sold ~2.5 million, Nikon ~1.75 million and Sony in third place with ~0.33 million, outselling Olympus and Pentax.
 
The 30%+ growth in the DSLR market is continuing so far for 2007 and similarly strong growth is expected for the next 5 years.
 
In contrast to this, the compact camera market grew 14 percent from ~88 million to ~100 million.
 
Canon remained No. 1 with 22 percent growth to 17 million units shipped in 2006. However, and this is a key to changes in the way Canon is looking at its DSLR marketing, Canon's total DSLR volume is growing but not as fast as the market, with Nikon and Sony taking the extra share.
Feature Competition
 
There is a feeling that the DSLR market is moving towards the 'feature wars' in the entry level consumer end that now exists in the 'Point & Shoot' (P&S) market.
 
Many P&S features are expected to 'trickle up' and into the entry level DSLR market (live view is the first, but also movies, face recognition etc.)
 
High end professional features are trickling down into the Enthusiast and Semi-professional range (e.g. Canon 40D from 1D III and Nikon D300 from D3)
Market Segmentation
 
Canon see four broad areas that they would focus on for the DSLR market:
 
    * Entry Level - people moving up from P&S and wanting ease of use. This is the fastest growing sector of the market and the 400D Rebel XTi has sold well. Here the marketing is more on kits and kit lenses. Nikon's target here is the D40 and D40x. This whole market is exploding and represents 70-80% of the current market (this varies by geographic region)
    * Enthusiast – someone more seriously into photography and more likely to buy a range of lenses. These are represented by the 40D. Nikon's target here is the D80 and forthcoming D80x (name not confirmed) This area is growing in volume as people upgrade, but is declining as a percentage due to the rapid grown at the entry level. Currently this represents around 10-20% of the market
    * Semi-Professional / Advanced Amateur – Someone doing wedding photography etc and not needing the features of a full studio camera or an advanced amateur photographer wanting the best image possible. These are represented by the Canon 5D. Nikon's target here is seen as the D300. This represents only 5% of the market, but is growing in numbers in line with the market.
    * Full professional end of the market (represented by the 1D series) which Canon differentiates into Sports and Studio. This being what they see as being two very different segments. This market has peaked in numbers (there are only so many professional photographers and most have now switched to digital) and is thus representing a declining proportion of the market (less than 3%)
 
Personal note- A wry smile crossed my face when I saw that Canon put Wedding Photography into the semi-pro market (it's an area I choose not to participate in ;-) :-) Note though, that Canon in the US has always marketed the 5D to the 'pro' market - here in the UK having one counts towards CPS membership
 
This position is seen by some within Canon as an evolution of their previous 3 tier model into a 4 tier model (1D series at the top).
 
Some indicators of this are:
 
    * The 5D and Nikon D200 (and now D300) have helped redefine what an enthusiast will spend on photography. This, plus the fixed market share and volume of the full professional end of the market, is creating a lot of focus on how best to target that market.
    * The D300's inclusion of many of the 'high end' features from their D3 is seen as a sign of serious competition for the Semi Profession and Advanced Amateur buyers. This is a profitable section of the market both because of mark-up on the bodies and potential for significant high end lens sales.
 
Canon have had to accept that the world of DSLRs was changing faster, and that some of their previous approaches to product development may have to change with it.
 
Since Nikon is still seen as the main competitor, the line up was seen as:
 
    * 350D / XT matched to the D40
    * 400D matched to the D40X
    * 40D matched to the D80
    * 5D replacement matched to the D300
    * 1D III matched to the D3
    * 1Ds III matched to a future D3X with 20+ MP (25 expected)
 
Generally Canon have aimed to price a little higher with more features so they are seen as better value. This has evolved over time as Nikon have added features and specifications while reducing their prices. The Canon price/performance strategy is now acknowledged to have caused some confusion (for example, people comparing the 40D to the D300)
Future technology
 
DIGIC IV uses less power, and is faster than the dual DIGIC 3 found in the 1D3 and 1Ds3. In particular it can support 16bit raw and the larger 40-50MP sensors under development. With the larger sensors, it also supports pixel-binning where pixels are aggregated to deliver low noise and higher ISO performance at lower resolutions.
 
Canon is working on a new generation CMOS sensor – lower voltage, full 100% cover micro-lenses and better dynamic range allowing 16 bit per channel raw files.
 
These will support a clean 6400 ISO similar to today's 1600 and go to 25600 with acceptable noise.
 
Target for this is the next generation of the 1D series cameras in 2010, before spreading to other models. These are being trialled at 50MP in FF format
 
Canon are very excited about these sensors – seeing them as being as big a step up in performance as their move from CCD to CMOS a decade ago.
 
What to do with those 50MP images... Canon are considering built in hard drives (moving or solid state) in the 80-100GB range in future generations of cameras – mostly likely in a optional grip.
 
Canon have working MPEG DIGIC III code for their P&S range
 
This was tried in some of the test cameras sent out during 1D Mk3 trials. It's expected that this will appear in the entry level camera (xxxD range) next year
 
Canon are seeing this as an important feature in the 1D Mk IV range in 2010 (it would be HD video)
The Mythical 3D
 
Canon still believe that a greater proportion of the market will move to be full frame as the cost of the sensors come down.
 
They have on-again / off-again plans to split the 5D and have a lower and higher end full frame model.
 
The higher end would be weather sealed, and have pro-level AF and exposure
 
The lower end would have a flash and be like a 40D but with full frame
 
This is being complicated by the emerging push to bring high end features into the mid range anyway (as per the Nikon D300.
 
However so far, Canon are still seriously considering the split.
In body IS
 
Canon are looking at in-body IS for the entry level range DSLRs.
 
They have worked out how to integrate it with the lens IS so that the in-body IS turns off if a lens with IS is attached and the lens IS is active.
 
There is no definite decision about its appearance - however it could be added to the 2nd generation 400D replacement (the 450D is already pencilled in for Jan. 2008)
 
Technologically, this could also be added to any other DSLR. However at the moment, Canon's engineers are opposed, believing that all those moving parts around the sensor is not good on a high end camera.
Faster Lens Upgrades
 
Lens design is very specialised, with Canon typically only being able to develop 3 or 4 new or upgraded lenses a year
 
Canon has several programmes of upgrades it wants to pursue:
 
    * Upgrading more of the wide primes (as per the 14mm L Mark II) Many of these are relatively old designs. These sell to FF professionals and will need upgrade as sensors climb into the 25MP+ range.
    * Upgrading the telephotos and telephoto zooms with latest generation IS. Some of these (e.g. 100-400mm ) have 1st and second generation IS and could benefit from an upgrade.
    * A broader range of consumer and enthusiast lenses with their affordable analogue based IS.
 
Personal request - can I have a new sharp TS-E wide angle please? :-)
 
Canon is looking at ways to expand its capabilities here using new design software and expanding the engineering teams in this area.
 
Many of the L series lenses (especially the primes) sell in relatively tiny quantities – often just a couple of thousand or less in a year. This makes the return on investment pretty limited. Canon actually makes these in single production runs where they make a year's supply in one go.
The competition
Nikon
 
Nikon are currently Canon's most serious competitor in the DSLR market. They have doubled their market share in most markets over the last 2 years, although Canon's actual DSLR volumes are still growing.
 
Some Canon thoughts on Nikon:
 
The D3 is seen as a very clever camera.
 
Some of the features that cause discussion/debate/concern include:
 
    * Very high ISOs – Some people feel that Canon could and should have done this too in the 1D III and 1Ds III.
    * A firmware change could easily allow the 1Ds III to have 6400 and the 1D III 12800 – giving better quality than the alternative of underexposing by -1 EV. One of the reasons this wasn't done is that Canon wanted even their top ISO to be seen as clean (Nikon has the reputation of offering high ISOs that were noisy) plus Canon -was- going to make a big deal out of 6400 ISO in the next generation.
    * Backward compatibility with their 1.5 crop lenses – Seen as smart. There is apparently a way round the EF-S lens issue that Canon already has.
    * Dynamic Cropping – Canon trialled this technology and didn't add it as there wasn't too much demand from the people doing the testing.
    * That high resolution VGA style Screen – Made by Sony and very new. Canon expect to source one for their next generation of cameras.
    * Live View AF – Some embarrassment in Canon about this. Basically the contrast based AF code is already there for DIGIC III from the P&S range. It was just felt that the AF sensors were better and more SLR like.
    * 12MP Sensor – Some negatives such as the small size of the 1.5 crop mode (5MP). The sensor is Nikon's and Canon haven't yet pulled one apart, but they know how to do the 100% micro lens cover (this was already planned for their next generation of sensors but gets harder as the sensor pixels gets smaller). Some Canon people have seen D3 images from Osaka and were very impressed. This is seen as the first Nikon sensor to challenge Canon's image quality.
 
The D300
 
    * Pro Level AF and metering - a big issue. Generally seen as marking a major change in the market. Canon and Nikon have retained their pro-level AF and exposure for their top line bodies, making that (and the extra size, ruggedness etc.) a real distinguishing point. The marketing point of view is that this was an inevitable part of competition and the same change is due in the xD series.
    * 6400 ISO – Seen as a bit of a gimmick by the Canon technical people. As the pictures seen so far look no better than 30D or 40D boosted. Once again marketing people would love for a firmware change to match this in the 40D etc.
    * 12.2 MP Sony Sensor – This is seen as market defining, since Sony have it in their A700 and are expected to sell it to Pentax for their K10 replacement.
 
The D3X
 
    * Nikon are known to be testing a camera for the studio market which is basically a D3 with an approximately 25MP FF sensor.
    * The timing is uncertain (Nikon's D3 slipped a lot in design) but is expected for 2008
    * Sony have a FF sensor in the 25MP range that they are expected to launch soon. It's not known as to whether this new camera would use a Nikon developed sensor (like the D3) or the Sony one.
 
The D80X
 
    * Nikon are expected to deliver an upgrade to the D80 (could be a D80X or given a new model ID like D90) in early 2008 once the D300 is out
    * This will have the 12.2MP sensor, live view etc. but in the consumer style body of the D80.
 
Sony
 
Seen as a very strong brand in the consumer's mind and a vigorous competitor to Canon in the P&S and video camera markets.
 
The initial Alpha 100 was seen [by Canon] more as an experiment by Sony
 
The new range of 3 units will include a FF DSLR
 
Lenses from Carl Zeiss are felt to provide a good high end heritage, while Minolta provides more the consumer end.
 
With only a single model, Sony have already outsold Pentax and Olympus (though sales have been patchy)
 
Future Sony paths
 
Sony are known to be pursuing several fronts over the next 2-3 years:
 
    * Becoming the CMOS sensor supplier of choice to Nikon, Pentax etc.
    * Designing CMOS sensors of up to 50MP in sizes up to 36mm x 36mm (i.e. square full frame)
    * Further upgrading their in-body IS.
    * Looking at high end technologies in their DSLRs such as hard disk drives, removable rear LCDs that can act as a live viewfinder.
    * Looking at a super high end body blending the DSLR with medium format removable back (see Canon MF and yesterday's DPR thread below)
 
Sony will have 3 new DLSR models over the next 12 months and are also expanding their range of lenses.
 
Do remember that this is a rumours page,
so although what we've been sent looks pretty good, use your own judgement!

They have worked out how to integrate it with the lens IS so that the in-body IS turns off if a lens with IS is attached and the lens IS is active.