When an entity, either individual, company, or group, wishes to takeover a public company, how does this work?
There are two levels of takeover. a) Taking a controlling interest in a company and b) buy all shares in the company so the company is fully owned. The difference will be fully discuss later, but both involve buying a large number of shares.
'Market Cap' vs 'large parcel' share price.
Both taking a controlling share and buying all shares require buying a large number of shares, which is not as simple as it seems, nor as inexpensive as one would think.
For all companies, there is a 'share price', which when multiplied by the number of shares, gives a total value of the company which is called a 'market capitalisation'. But the company cannot normally be purchased for this market capitalisation figure. In fact no significant percentage of the company (or 'large parcel' of shares) can normally be obtained for the relevant percentage of the market capitalisation. So why not?
For any publicly listed share, there is a 'last sale price' (used for the market capitalisation calculation) as well as a 'buy price' and a 'sell price'. However if buying or selling a large number of shares, it becomes apparent that the 'buy price' and 'sell price' are valid only for a limited number of shares. Lets just consider buying shares for now, although a similar principle applies to trying to sell shares.
Consider a hypothetical share. A detailed 'seller list' would look something like this:
Selling price, Qty
$25.30 ....50,000
$25.50 ....40,000
$25.75 ....60,000
$25.80 ....25,000
etc
In this case 150,000 shares could be bought by first offering to buy 50,000 at $25.30, then offering to buy 40,000 at $25.50, then offering to buy another 60,000 at $25.65. This would result in an average buy price of around $25.53, even though the shares initially would have shown a buy price of $25.30.
The greater the proportion of shares to be bought, the higher the average actual buy price will rise.
Note, in the above example, since these shares were already on offer for the prices listed, offering to buy 150,000 for $25,75 or even $30.00, would successful purchase those shares at their listed prices. Of course the danger in offering $30.00 for the 150,000 is that if someone else bought the shares on the list first, as long as other people are offering shares for $30.00 or less, the purchase would still proceed and the average purchase price could be as high as $30.00.
At a certain point, the shares already offered for sale might all be purchased, still without reaching the target percentage. Not only are the shares actually on offer at a variety of prices, progressively higher and higher than the price used to calculate 'market capitalisation', but insufficient shares may be on offer to achieve the desired number of shares. In this case other shareholders have to be persuaded to sell.
Since potential sellers have seen the price of each transaction increase as the offered shares are progressively purchased, expectations of any new sellers will be higher. Some sellers simply may not desire to sell. The equation could become like trying to buy a house not being offered for sale.
The reality is a price 25% or even 50% higher than the initial price may have to be offered to persuade a sufficient number of new sellers.
Two extra factors also come into play: 'compulsory acquisition' and 'general offer'.
General Offer.
Company by-laws will usually have a 'general offer' provision. A general offer provision recognises that someone wishing to buy a large number of shares will be seeking control of the company and may make fundamental changes to the company. In order to protect existing shareholders, once the threshold of share purchase of the general offer is reached, the offer must be extended to ALL shareholders. For example, if the general offer provision is set to trigger at 40% of shares, then any shareholder who reaches an ownership level of 40%, must extend the offer which was accepted by the sellers who's shares trigger the 40% owner ship to all other shareholders. So for example, if a buyer holding 35% of all shares, secured an extra 4%, nothing special happens. However if they instead secure an extra 5% of shares, then they are required to offer to buy all the remaining 60% of shares so a much larger bank balance is required! The nature of a general offer is such that is must be offered to all remaining shareholders on the same terms and conditions, however the general offer can be conditional on a certain number of shares being secured. So the offer can be made, for example. with the provision that 75% of shares (more commonly 100%) are will transfer as a result of the offer. If more than the required number accept, all those who accept get to sell. If less than the number accept, then no deal at all.
Compulsory Acquisition.
Shares in a company, depending on the company by laws, will usually have a 'compulsory acquisition' rule. Under such a rule, once a general offer is made, and a acceptance of the general offer will result in the buyer owning more that a certain percentage of the company (e.g for 95% of shares) then the small percentage of shareholders not electing to accept the general offer are deemed to accept even if they do not wish to accept. This is designed to prevent one or two shareholder trying to extort a premium for the last few shares, and as a result blocking a deal that shareholders generally desire.
Summary.
While potential buyers of a company can buy a small number of shares 'on the market' for some small premium above the initial share price, this will usually all be a waste of money if a 'general offer' is not accepted subsequently by the vast majority of shareholders. Since buying the 'on market' shares will raise the share price and lift expectations, resulting in the need to make a higher general offer, buying the on market shares is usually ill advised. The general offer will still usually need to substantially exceed the initial share price.
Buying any large parcel of shares requires paying a price per share significantly higher than current share price applicable at the time.
The reverse applies if selling a large parcel of shares- then the price will be quickly drop.
Sunday, October 23, 2011
Wednesday, October 19, 2011
Are there really aliens out there? Then where are the aliens?
The simple answer is 'Yes'. Statistically, it is inconceivable that there is no other life in the universe is just too improbable. In our galaxy there are between 200-400 billion stars in our galaxy. There are over 200 billion galaxies in the universe.
The two big real questions are, how frequently does life occur, and how frequently does intelligent life appear?
To calculate the frequency of intelligent life we should be able to detect, we have the drake equation. To calculate how many aliens we should discover, a number of constants must be plugged into the drake equation and the challenge lies in determining the value of these constants. However the constants are calculated, the fact is there are clearly less intelligent aliens out there then we would expect. This surprising lack of evidence of intelligent alien life is referred to as the Fermi paradox.
There is solid evidence that the building blocks for life exist in space. There is ambiguous evidence that remains of actual life have been found on meteorites, but this is not conclusive. But when it comes to intelligent civilisations, we should be able to at least detect their radio signals from thousands of light years away yet a very intensive search, SETI, has found nothing.
So we are left with one of two conclusions. Either life itself is remarkably rare, or the evolution of life sufficiently intelligent to transmit radio signals in the manner we do from Earth is extremely rare.
Why do we have a rare intelligent civilisation here on Earth?
The question arises, that if intelligent civilisations are so rare, how did we manage to get one on Earth.
Here are some of the theories:
1) The 'rare earth' theory. This theory proposes that Earth enjoys a set of conditions necessary for life that are extremely rare in the universe.
2) The 'low probability of intelligence' theory, which proposes that even on Earth the probability of intelligent civilisation are very low.
3) The 'self destruction theory' which proposes that intelligent civilisations may normally self destruct so quickly that they are a fleeting existence.
Any others?
I will discuss these alternatives soon.
The two big real questions are, how frequently does life occur, and how frequently does intelligent life appear?
To calculate the frequency of intelligent life we should be able to detect, we have the drake equation. To calculate how many aliens we should discover, a number of constants must be plugged into the drake equation and the challenge lies in determining the value of these constants. However the constants are calculated, the fact is there are clearly less intelligent aliens out there then we would expect. This surprising lack of evidence of intelligent alien life is referred to as the Fermi paradox.
There is solid evidence that the building blocks for life exist in space. There is ambiguous evidence that remains of actual life have been found on meteorites, but this is not conclusive. But when it comes to intelligent civilisations, we should be able to at least detect their radio signals from thousands of light years away yet a very intensive search, SETI, has found nothing.
So we are left with one of two conclusions. Either life itself is remarkably rare, or the evolution of life sufficiently intelligent to transmit radio signals in the manner we do from Earth is extremely rare.
Why do we have a rare intelligent civilisation here on Earth?
The question arises, that if intelligent civilisations are so rare, how did we manage to get one on Earth.
Here are some of the theories:
1) The 'rare earth' theory. This theory proposes that Earth enjoys a set of conditions necessary for life that are extremely rare in the universe.
2) The 'low probability of intelligence' theory, which proposes that even on Earth the probability of intelligent civilisation are very low.
3) The 'self destruction theory' which proposes that intelligent civilisations may normally self destruct so quickly that they are a fleeting existence.
Any others?
I will discuss these alternatives soon.
Wednesday, October 12, 2011
How do tennis rankings work?
In response to a player climbing the rankings, I was asked 'why would a tennis player care if they are not number 1 or something?'
Well, the reality is ranking really do matter to players. To enter tournaments with the big prize money, you need a good 'ranking', as entry to tournaments is decided purely by this ranking.
For every tournament, players earn 'rankings points', and the cumulative 'ranking points' earned over the previous 12 months, determines a players ranking. The player with the most points is number 1, right down to players ranked well over 1,000.
Different tournaments, different points.
A good Ranking earns entry to the biggest prize-money tournaments!
Overall, there are ATP (Association of Tour Professionals) tournaments, 'challenger' tournaments, and 'futures' tournaments, each delivering decreasing points, with the main tennis tour being the ATP tournaments. But to gain entry to ATP tournaments, you need a ranking, which when you don't already have a ranking, must be earned at the 'challengers' and 'futures'. The higher the ranking you have the greater your opportunity to earn a higher ranking, and prize-money!
For men's tournaments, currently in 2011, there are four 'grand slam' tournaments with 2,000 points for the winner. Lesser points are awarded for reaching earlier stages of tournament with some points available just for being invited. Below the 'grand slams' are ATP 1,000 tournaments with 1,000 points for the winner and 500 and 250 tournaments with, of course, 500 or 250 points respectively for the winner.
What Ranking is Required to play in which tournaments?
Once ranking reaches around 200 in the world, you may be eligible to enter some ATP tournaments 'qualifying' competitions. Here is a list (incomplete) of what reaching various world rankings enable.
Rank. Tournament Entry/Benefit
Below the top 200 - futures and challenger tournaments
200 Some Qualifier competitions prior to main tournaments
100 Direct Entry to Grand Slam Tournaments
90 Direct entry to '1000' series tournaments in Miami and Indian Wells
50-60 Direct entry to '500' series tournaments, and '250' tournaments
50 Direct entry to remaining '1000' series tournaments, and all other ATP tournaments
32 Seeded player in grand slams
16 Seeded player in 1000 series tournaments
8 Seeded player with direct entry to 2nd round in 1000 series tournaments
Additionally, a ranking of 8 or below at year end.....exclusive entry to year end tournament open only to top 8 players.
So how does it work? - The boring details
Competitions are played in 'rounds'. Only the winners of each round progress to the next round, so each round has half the number of players of the previous round. This means there are 2 players in the final round, 4 players for the 'semi-final', 8 players for the 'quarter-final', and a round prior to the quarter final with 16 players. A five round tournament can have 32 players in a round prior to the round with 16, and a 6 round tournament can have 64 players in the first round, while a 7 round tournament can have 128 players in the first round.
The 'Grand Slams' and 1000 series tournaments are compulsory for all registered players and they are automatically entered if their ranking is high enough. The smaller 500 and 250 tournaments are not compulsory, and at least two tournaments are held at the same time.
Grand Slams
There are four 'Grand slams'. These are played over 7 rounds, and there are 128 players in a 'grand slam' competition. However 16 places go to players entering through the qualifying tournament. This leaves 112 places, but of these 8 places are given to 'wild cards' who are given entry even though their ranking would not normally allow them to play. So 104 places are filled directly from the points ranking system. Of course at any given time their will be some some players who are injured so up to as high as 110 ranked player may gain entry.
Special ATP 1,000 tournaments:Miami and Indian Wells.
These two tournaments are played over 7 rounds as the grand slams are, but 32 places are 'byes' or empty places, allowing 32 players to have no opponent in the first round. This means there are 96 places in these tournaments, and with 12 places going to qualifiers and 4 places going to wild cards, leaving 8o places for direct entry to the tournament. The top 32 players having byes in the first round allows for both round 1 and 2 to have 32 matches.
Other 1000 series Tournaments
These 7 other 1000 tournaments, are played with 6 rounds, and with 8 players having byes in the first round, there are 56 places in the tournaments. Of these, 7 are allocated to the qualifying tournament and usually 4 wild cards, leaving 45 places for direct entry. This can allow for up to approximately a ranking of 50 if as many as 5 players are injured.
500 Series tournaments
Just as 1000 tournaments can be either 6 or 7 rounds, 500 tournaments can be 5 or 6 rounds.
The 6 round tournaments (currently Barcelona, Washington and Hamburg) have either 56 places (using 8 byes in round 1) or 48 places (with 16 byes in round 1). With around 8 places going to qualifying and wild cards, there are around 48-42 direct places.
The other 8 tournaments have 5 rounds and have 32 places, as currently none have any byes. Allowing 4 qualifiers and 3 wild cards leaves 25 direct places, but these smaller tournaments are always held at the same time as either another 500 tournament or two 250 tournaments, so players down to at least ranking of 50 can get a direct place into a tournament. In fact, since these tournaments are not compulsory, some higher ranked players may take a break and normally it is possible to get entry to tournament with a rank of around 60.
ATP 250 Tournaments
With even less points and prize money available, some of the best players may skip some of the these tournaments. Also, there is more than one at a time, so of those very top players who do enter, there are shared amoung tournaments. Currently there are two 250 tournaments with 6 rounds being London (56 players) and Winston Salem (48 players) while all the 39 other 250 tournaments have 5 rounds and either 32 players or more often 28 places with 4 byes available to highest four ranking players that enter. Despite the 28 being reduced by 4 qualifiers and up to 3 'wild cards' the fact that there can be as many as three tournaments at once can mean players ranked as low as 70 can often find a direct entry available.
Appendixes
Tournament combinations:
56 places (8 byes for highest ranked)
48 places
32 places. 3 wild cards, 4 qualifiers
rotterdam (32)/250s
memphis(32)/250s
dubai(32)/acapulco(28)
bacelona (56)
hamburg(48)
washington(48)
china(32)/tokyo(32)
valencia(32)/basel(32)
250
48
32
28
Qualifying Tournaments
Grand Slam: 128 for 16 places
Miami/Indian Wells: 48 for 12 places
Remaining 1000 tournaments:28 for 7 places
500 Tournaments: 16 for 4 places
250 Tournaments: 16 for 4 places
Well, the reality is ranking really do matter to players. To enter tournaments with the big prize money, you need a good 'ranking', as entry to tournaments is decided purely by this ranking.
For every tournament, players earn 'rankings points', and the cumulative 'ranking points' earned over the previous 12 months, determines a players ranking. The player with the most points is number 1, right down to players ranked well over 1,000.
Different tournaments, different points.
A good Ranking earns entry to the biggest prize-money tournaments!
Overall, there are ATP (Association of Tour Professionals) tournaments, 'challenger' tournaments, and 'futures' tournaments, each delivering decreasing points, with the main tennis tour being the ATP tournaments. But to gain entry to ATP tournaments, you need a ranking, which when you don't already have a ranking, must be earned at the 'challengers' and 'futures'. The higher the ranking you have the greater your opportunity to earn a higher ranking, and prize-money!
For men's tournaments, currently in 2011, there are four 'grand slam' tournaments with 2,000 points for the winner. Lesser points are awarded for reaching earlier stages of tournament with some points available just for being invited. Below the 'grand slams' are ATP 1,000 tournaments with 1,000 points for the winner and 500 and 250 tournaments with, of course, 500 or 250 points respectively for the winner.
What Ranking is Required to play in which tournaments?
Once ranking reaches around 200 in the world, you may be eligible to enter some ATP tournaments 'qualifying' competitions. Here is a list (incomplete) of what reaching various world rankings enable.
Rank. Tournament Entry/Benefit
Below the top 200 - futures and challenger tournaments
200 Some Qualifier competitions prior to main tournaments
100 Direct Entry to Grand Slam Tournaments
90 Direct entry to '1000' series tournaments in Miami and Indian Wells
50-60 Direct entry to '500' series tournaments, and '250' tournaments
50 Direct entry to remaining '1000' series tournaments, and all other ATP tournaments
32 Seeded player in grand slams
16 Seeded player in 1000 series tournaments
8 Seeded player with direct entry to 2nd round in 1000 series tournaments
Additionally, a ranking of 8 or below at year end.....exclusive entry to year end tournament open only to top 8 players.
So how does it work? - The boring details
Competitions are played in 'rounds'. Only the winners of each round progress to the next round, so each round has half the number of players of the previous round. This means there are 2 players in the final round, 4 players for the 'semi-final', 8 players for the 'quarter-final', and a round prior to the quarter final with 16 players. A five round tournament can have 32 players in a round prior to the round with 16, and a 6 round tournament can have 64 players in the first round, while a 7 round tournament can have 128 players in the first round.
The 'Grand Slams' and 1000 series tournaments are compulsory for all registered players and they are automatically entered if their ranking is high enough. The smaller 500 and 250 tournaments are not compulsory, and at least two tournaments are held at the same time.
Grand Slams
There are four 'Grand slams'. These are played over 7 rounds, and there are 128 players in a 'grand slam' competition. However 16 places go to players entering through the qualifying tournament. This leaves 112 places, but of these 8 places are given to 'wild cards' who are given entry even though their ranking would not normally allow them to play. So 104 places are filled directly from the points ranking system. Of course at any given time their will be some some players who are injured so up to as high as 110 ranked player may gain entry.
Special ATP 1,000 tournaments:Miami and Indian Wells.
These two tournaments are played over 7 rounds as the grand slams are, but 32 places are 'byes' or empty places, allowing 32 players to have no opponent in the first round. This means there are 96 places in these tournaments, and with 12 places going to qualifiers and 4 places going to wild cards, leaving 8o places for direct entry to the tournament. The top 32 players having byes in the first round allows for both round 1 and 2 to have 32 matches.
Other 1000 series Tournaments
These 7 other 1000 tournaments, are played with 6 rounds, and with 8 players having byes in the first round, there are 56 places in the tournaments. Of these, 7 are allocated to the qualifying tournament and usually 4 wild cards, leaving 45 places for direct entry. This can allow for up to approximately a ranking of 50 if as many as 5 players are injured.
500 Series tournaments
Just as 1000 tournaments can be either 6 or 7 rounds, 500 tournaments can be 5 or 6 rounds.
The 6 round tournaments (currently Barcelona, Washington and Hamburg) have either 56 places (using 8 byes in round 1) or 48 places (with 16 byes in round 1). With around 8 places going to qualifying and wild cards, there are around 48-42 direct places.
The other 8 tournaments have 5 rounds and have 32 places, as currently none have any byes. Allowing 4 qualifiers and 3 wild cards leaves 25 direct places, but these smaller tournaments are always held at the same time as either another 500 tournament or two 250 tournaments, so players down to at least ranking of 50 can get a direct place into a tournament. In fact, since these tournaments are not compulsory, some higher ranked players may take a break and normally it is possible to get entry to tournament with a rank of around 60.
ATP 250 Tournaments
With even less points and prize money available, some of the best players may skip some of the these tournaments. Also, there is more than one at a time, so of those very top players who do enter, there are shared amoung tournaments. Currently there are two 250 tournaments with 6 rounds being London (56 players) and Winston Salem (48 players) while all the 39 other 250 tournaments have 5 rounds and either 32 players or more often 28 places with 4 byes available to highest four ranking players that enter. Despite the 28 being reduced by 4 qualifiers and up to 3 'wild cards' the fact that there can be as many as three tournaments at once can mean players ranked as low as 70 can often find a direct entry available.
Appendixes
Tournament combinations:
56 places (8 byes for highest ranked)
48 places
32 places. 3 wild cards, 4 qualifiers
rotterdam (32)/250s
memphis(32)/250s
dubai(32)/acapulco(28)
bacelona (56)
hamburg(48)
washington(48)
china(32)/tokyo(32)
valencia(32)/basel(32)
250
48
32
28
Qualifying Tournaments
Grand Slam: 128 for 16 places
Miami/Indian Wells: 48 for 12 places
Remaining 1000 tournaments:28 for 7 places
500 Tournaments: 16 for 4 places
250 Tournaments: 16 for 4 places
Tuesday, October 11, 2011
Tennis trivia - part 1
A comment was made about Bernard Tomic reaching possibly reaching the top 10 in tennis rankings while still 19 yrs old.
It occured to me to look at the history for current grand slam winners
Name- age when first reached top 10
Nadal - 18
Djokovic - 19
Roger Federer - 21
Juan Martin Del Potro -20 ( missed reaching top 10 at 19 by 1 month)
Andy Roddick - 19
LLeyton Hewitt - 19
Andy Murray has not won a slam, and he also took 1 month too long reaching to top 10 to be 19years old at the time. But he was also very close at 20yrs, 1month, 3 days.
So if Bernard Tomic does not reach the top 10 next year (at the end of the year he will be 20yrs and 2 months), he will be already getting old reaching the top 10 to be a future grand slam winner.
Previous great players that come to mind, and I can find the data:
Bjorn Borg: 18
Jimmy Connors: Turned pro at 19- definitely was top 10 by 20 but not data prior to age 20
John McEnroe: 19
Pete Sampras: 19 (missed being ranking at 18 by 1 month)
Ivan Lendl: 20
Boris Becker: 17
Jim Courier: 20
Mats Wilander: 18
Stephan Edberg: 19 (missed 18 by 1 month)
So, historically, a standout player will reach the top 10 by around 19 years
It occured to me to look at the history for current grand slam winners
Name- age when first reached top 10
Nadal - 18
Djokovic - 19
Roger Federer - 21
Juan Martin Del Potro -20 ( missed reaching top 10 at 19 by 1 month)
Andy Roddick - 19
LLeyton Hewitt - 19
Andy Murray has not won a slam, and he also took 1 month too long reaching to top 10 to be 19years old at the time. But he was also very close at 20yrs, 1month, 3 days.
So if Bernard Tomic does not reach the top 10 next year (at the end of the year he will be 20yrs and 2 months), he will be already getting old reaching the top 10 to be a future grand slam winner.
Previous great players that come to mind, and I can find the data:
Bjorn Borg: 18
Jimmy Connors: Turned pro at 19- definitely was top 10 by 20 but not data prior to age 20
John McEnroe: 19
Pete Sampras: 19 (missed being ranking at 18 by 1 month)
Ivan Lendl: 20
Boris Becker: 17
Jim Courier: 20
Mats Wilander: 18
Stephan Edberg: 19 (missed 18 by 1 month)
So, historically, a standout player will reach the top 10 by around 19 years
Saturday, October 1, 2011
nikon's giant stride on the march to 'mirrorless cameras'
Recently I saw a camera forum topic entitled 'is the future mirrorless?'
For some time there has been changes to the enthusiast and professional photography market which is still dominated by 'DSLRs' which use a mirror or prism.
All new 'DSLR' systems now allow dispensing with the mirror (or Prism) for some photographs, and some of systems now do not even include a mirror or prism in the camera at all! The change to eliminate the mirror mechanism all together is often refereed to as mirrorless.
Dispensing with the mirror brings the following changes and advantages.
1) Removes a complex mechanical system, allowing smaller and ideally simpler cameras
2) Allows use of a screen to frame photos
3) Prohibits use of an optical viewfinder, forcing use of a screen or electronic viewfinder
4) Requires a new focusing system
5) Allows capture of video images
6) Allows for higher speed frame rates when capturing multiple images
Points 2 and 5 can be provided by simply not using the mirror in when these features are desired, and this has proved so compelling that all DSLRs have now added this capability.
Point (6) has so far been a potential benefit, not yet realised.
Whilst points (1) is a clear benefit of going further and actually removing the mirror mechanism, points (3) and (4) have been so far seen as counterbalancing negatives, as there have been limitations to electronic view finders and new focusing systems.
Whilst for some uses it can already be argued that new focusing systems are actually an improvement, Nikon has recently released the 1 series, which so far represents a significant step forward in new focussing systems. For the first time, one of the two largest DSLR companies, is claiming best auto focusing results without the mirror. At the same time, Nikon has started to realise point (6), faster frame rates.
This further changes the equation of when a mirror system will be preferred. As this system new auto focus system is introduced in Nikon DSLRs, using the mirror will change.
Pre new auto-focus system:
Use mirror if : using optical view finder or requiring best focus system
Do not use mirror if: taking video footage or using screen to frame photos
Now, with new Nikon technology:
Use mirror if: requiring optical viewfinder
Do not use mirror for: best auto-focus technology, fastest frame rate, shooting video, using electronic live image for framing
Clearly, the cases for using the mirror are dramatically reduced. Whilst impact of this new technology is yet to be experienced in a DSLR, it is clear that the occasions the mirror is used will significantly be reduced, and the case for the final step of removing the mirror altogether will be compelling for a larger percentage of camera buyers.
In fact, if most photos are now taken without the using the mirror, cameras will either need to add an electronic viewfinder in addition to the optical viewfinder for any photographer who prefers a viewfinder and desires optimum auto focus results. The case for keeping the mirror, and the optical viewfinder will become increasingly weak, particularly in cameras which have very good low light capabilities and can therefore deliver best results through an electronic viewfinder.
For some time there has been changes to the enthusiast and professional photography market which is still dominated by 'DSLRs' which use a mirror or prism.
All new 'DSLR' systems now allow dispensing with the mirror (or Prism) for some photographs, and some of systems now do not even include a mirror or prism in the camera at all! The change to eliminate the mirror mechanism all together is often refereed to as mirrorless.
Dispensing with the mirror brings the following changes and advantages.
1) Removes a complex mechanical system, allowing smaller and ideally simpler cameras
2) Allows use of a screen to frame photos
3) Prohibits use of an optical viewfinder, forcing use of a screen or electronic viewfinder
4) Requires a new focusing system
5) Allows capture of video images
6) Allows for higher speed frame rates when capturing multiple images
Points 2 and 5 can be provided by simply not using the mirror in when these features are desired, and this has proved so compelling that all DSLRs have now added this capability.
Point (6) has so far been a potential benefit, not yet realised.
Whilst points (1) is a clear benefit of going further and actually removing the mirror mechanism, points (3) and (4) have been so far seen as counterbalancing negatives, as there have been limitations to electronic view finders and new focusing systems.
Whilst for some uses it can already be argued that new focusing systems are actually an improvement, Nikon has recently released the 1 series, which so far represents a significant step forward in new focussing systems. For the first time, one of the two largest DSLR companies, is claiming best auto focusing results without the mirror. At the same time, Nikon has started to realise point (6), faster frame rates.
This further changes the equation of when a mirror system will be preferred. As this system new auto focus system is introduced in Nikon DSLRs, using the mirror will change.
Pre new auto-focus system:
Use mirror if : using optical view finder or requiring best focus system
Do not use mirror if: taking video footage or using screen to frame photos
Now, with new Nikon technology:
Use mirror if: requiring optical viewfinder
Do not use mirror for: best auto-focus technology, fastest frame rate, shooting video, using electronic live image for framing
Clearly, the cases for using the mirror are dramatically reduced. Whilst impact of this new technology is yet to be experienced in a DSLR, it is clear that the occasions the mirror is used will significantly be reduced, and the case for the final step of removing the mirror altogether will be compelling for a larger percentage of camera buyers.
In fact, if most photos are now taken without the using the mirror, cameras will either need to add an electronic viewfinder in addition to the optical viewfinder for any photographer who prefers a viewfinder and desires optimum auto focus results. The case for keeping the mirror, and the optical viewfinder will become increasingly weak, particularly in cameras which have very good low light capabilities and can therefore deliver best results through an electronic viewfinder.
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