Micro four thirds cameras from Olympus and Panasonic have been very successful because they offer DSLR like image quality in a small size package. This has prompted Canon to develop a smaller version of DSLR camera that will compete with “mirrorless” micro four thirds cameras. Canon will follow basic DSLR design with internal mirror, rather than using micro four thirds design that remove the mirror to make the camera smaller while keeping the image sensor size bigger.

"It's not a question of whether or not you have a mirror. There is a consumer need for good-quality cameras to be made smaller," said Masaya Maeda, head of the Image Communication Products division at Canon. “We will meet this need.”

He also added that Canon has made very small SLR cameras in past and hence he is confident that Canon could achieve smaller form factor without removing the mirror.

No word on when Canon will actually ship the new camera, but it is believed that Canon is aiming for early next year.
[Via Reuters]