Basically at some point they're going to hit the point of diminishing returns with 35mm format and APS format. If electronics fabrication keeps getting cheaper & yields keep going up at some point it will cost the company less $$ to use the same sensor in their entire DSLR lineup then to design and manufacturer a different sensor for each camera. They'll instead work on body features and the software running the camera to differentiate products and provide a way to keep margins up.
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The limit is probably not really in the resolution that can or cannot be achieved by better technologies. The limit lies mostly in how flat images are used and what resolution is required for that purpose.
Once most people reach the conclusion that the camera they have is good enough for their usage, they will stop buying new stuff that bring no additional value and that will be the end of fast paced technological improvement. In my opinon, we are basically already there. Give it one or 2 more generations, 1600 ISO noiseless 10MP sensors with 2 more stops DR and 99% of photographers on earth will be happy forever.
We should not forget that we - at LL - are a tiny niche in the huge market for photographic gear. Nobody will develop specifically something for us that we can afford once the masses are happy.
We only have to look at other domains and see what drives progress there once a major paradigm change has overcome its first happy years:
- laws (automotive industry,...), especially those related to the environment,
- more of less artificially introduced constraints and demands (PC hardware reacting to less and less efficient software standards,...),
- ...
None of these apply to photography IMHO. There is probably nothing ahead of us besides millions of images taken with talent and inspiration. And I personnally find this most interesting.
Cheers,
Bernard