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Ideally, a consumer product will integrate the best of both worlds and will have the still quality of a digital still camera and the video quality of a camcorder. It is an unrealistic expectation that the user will continue to carry two devices.
Ambarella Inc.
OK, if it's high quality I will also welcome h.264/AVC recording. Ambarella Inc. apparently delivers high quality one chip solutions for the next generation of still/video hybrid cameras. We should expect to see more in this direction.
Ambarella promise: unite HD video, still photos without compromise.