Market research firm Gfk has released figures suggesting that, far from being overrun by sophisticated camera-phones, the digital camera market has actually just enjoyed its most lucrative Christmas period ever.

According to Gfk nearly 1.2million compact digital cameras were sold in December 2007, an increase of 13.5 per cent compared to December 2006. During the same period DSLR sales rose 22.7 per cent to nearly 54.5 thousand units. In total, the UK spent £142.1 million pounds on digital cameras in December alone.

The figures must come as a great relief to digital camera manufacturers, especially in light of the threat posed by the megapixel arms race currently being played out in the high-end camera-phone market.

Some observers have predicted that the performance gains shown by recent 5MP camera-phones could threaten the long-term viability of the dedicated digital camera market. However, for the time being at least consumer demand for dedicated digital cameras is higher than ever.

One major reason for this, as consumers are beginning to understand, is that there’s a lot more to a good camera than the number of megapixels it boasts. While camera-phones have evolved a great deal in recent years they remain leagues behind dedicated digital cameras in terms of image quality.

In other words, while camera-phones are perfectly adequate for late-night drunken parties, most consumers will continue to take a ‘proper’ camera with them on holiday.