This week we will have a look at the sensor wars going on between Canon and Sony. Let's start off things by doing a level set. A sensor is just one component of a camera; an important one but it is just a piece of the puzzle. The fact remains most of us buy a camera because it is part of a complete eco-system, eg. There are upgrade paths to higher level camera bodies, a full lens selections all the way from amateur to professional, lighting systems, accessories and complementary eco-systems in the area of education. 

So let's get back to the subject of sensors. Lately this has been a hot topic that has really inflamed relations between Nikon and Canon fanboys. Canon for the most part dominated the high megapixel sensors in the past few years. The Nikon D3x was actually unusual as the rest of the Nikon lineup was not at this level. Canon enjoyed dominance in the sensor race for a few years. Then out of nowhere Nikon introduced the D800 with a 36 megapixel sensor and a short time later Nikon announced that the entry level D3200 model would have a 24 megapixel sensor. 

What is clear is that Canon and Nikon have both been in the first place position when introducing technology. Then periodically the competitor leap frogs you with a major introduction to technology. Thus we can assume that Canon will rally it's engineering staff to regain the technology lead at some point. Until then let's examine the reason how Nikon overtook the sensor wars. The actual reason would go back over 3+ years. Nikon made a strategic business decision that they would no longer follow a sole source strategy for the design and production of sensors for the Nikon camera bodies. This meant that the in-house Nikon engineering staff would have to compete with external vendors for sensor designs. This allowed Nikon to introduce cameras with in-house Nikon developed sensors and sensors from Sony or Aptina. This created a very competitive atmosphere in which engineers thrive. We can expect to see more these co-productions and mutiple sourcing strategy from Nikon in the future.

The other thing to consider in the on-going debate about the merits of different sensors is that we are talking about two different lines of business. There is the sensor business and there is the camera business. In Canon's case they try to compete in both lines of business. In Nikon's case they have a different business model, which is to multi-source, contract out and work in partnership with other companies to introduce imaging technologies that will benefit their customers.

Canon on the other hand made a business decision a long time ago to sole source the design and production of sensors to internal Canon staff. The danger of sole sourcing in business is that you will pay a higher price for your product/service or you will no longer be on the leading edge of technology. On the other hand external sensor designers and manufacturers would have economy of scale that Canon would not have. Canon would require 1-2 million sensors a year including the point and shoot market.  I think that Canon miss-read the changing sensor market. The third party sensor companies would be designing and producing sensor designs and manufacturing for different markets and companies. They would be producing for DSLR's, point and shoots and for the smart phone market. The smart phone market is a huge market involving hundreds of millions of sensors. This economy of scale permits these companies to invest in research and development. 

Does this mean that Canon may change their direction on sole sourcing of their DSLR sensors. I think it is safe to say that this would only be known by the upper level executives at Canon. Canon is not down and out and it is only experiencing a technology lead change which given history is only a temporary situation. I am going to venture a guess that Canon will release some competitive sensors in 2013-2014. Until then, Nikon will be releasing two more DSLR camera bodies in 2012 and all indications are that these will be 24 megapixel or higher. 

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