While most people focus on the number of mega pixels as a measure for the camera sensor quality there are many other factors that determine the quality of the pictures generated by the sensor one of them is the sensor physical size.
A digital photo is a collection of pixels that when displayed next to each other create the illusion of a smooth crisp digital photo. Each pixel in the digital photo has a few attributes such as its color and intensity. The digital SLR takes digital photos by capturing the color and intensity of many pixels simultaneously. This process is done when the shutter is pressed. When the shutter is pressed the digital camera sensor collects for the duration of the sensor time the color and intensity of each pixel usually numbered in the millions.
The digital camera uses a sensor known as a CCD. The CCD is a silicon chip that is built from many tiny light sensors. Each light sensor captures the color and intensity of one pixel. The size of the CCD sensor directly correlates with the size of each such light sensor. For the same number of mega pixels in a sensor the larger the CCD sensor the bigger each light sensor is.
The CCD pixel light sensor size is important to the quality and optical attributes of the CCD. For example the larger the light sensor the more light energy it can accumulate in a specific period of time. The result is that larger CCD with larger light sensors is more sensitive to light and can thus take digital photos in darker scenes than smaller CCD. Bigger light sensor can collect more energy and thus require less amplification in order to capture photos in lower light scenes. The result of less amplification is less noise and sharper images.
Practically speaking if you have two cameras lets say the digital SLR and another digital camera with a bigger CCD but the same number of mega pixels taking digital photos in low light conditions with the digital SLR will result in darker and more noisy photos while the other digital camera will result in brighter and sharper digital photos.
Bigger CCD sensors are more expensive to manufacture and correspondingly digital cameras that use bigger CCD sensors are more expensive. The reason for the higher cost is that in the manufacturing process the probability of having defective CCD sensors is higher when the CCD sensor is bigger since there is more silicon space that might have defects on it. For that reason cheaper pocket cameras usually use smaller CCD sensors while high end digital SLR cameras use bigger CCD sensors and sometimes CCD that are known as full frame CCD. A full frame CCD is a CCD sensor that is equivalent in size with the old film frames 35mm in size.
Another implication of the CCD sensor size is the optical depth of field. The depth of field is directly influenced by the aperture and the CCD sensor size. For that reason many digital camera manufacturers normalize their optical attributes to correlate with 35mm sensor size equivalent numbers or in other words with old film camera sensors.
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