According to a research by BCN Inc, a research firm, the combined market share of Canon and Nikon has fallen by 35% while big rival Sony has increased its share twofold.
In Japan, where compact system models are taking off the most, compact systems accounted for more than 40% of interchangeable lens cameras in July, compared with just 5% in 2009.
Globally, sales have climbed to 2.1 million units in 2010, a five times increase. Shares of the overall market are likely to hit 23% in 2011, up from 16% in 2010, according to estimates from Macquarie Group Ltd.
Last month, Sony announced two new mirrorless models for its NEX range, including the Sony NEX-7 which features a 24.3 megapixel APS-C sensor and an advanced electronic viewfinder.
Traditional cameras are still a good moneymaker for Canon, which earned 114.8 billion yen in profit last year by selling 5.9 million units, roughly four times the amount it makes from compact cameras. Similarly, Nikon earned more from SLRs and lenses than from any other product.
According to Sony, although mirrorless cameras are extremely popular in Japan, they have failed to reach the same level of popularity in Europe and the U.S. because "the big camera makers" still haven't entered the market.
Keep following TechRadar for more on any potential compact system cameras from Canon and Nikon.
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Amy has been writing about cameras, photography and associated tech since 2009. Amy was once part of the photography testing team for Future Publishing working across TechRadar, Digital Camera, PhotoPlus, N Photo and Photography Week. For her photography, she has won awards and has been exhibited. She often partakes in unusual projects - including one intense year where she used a different camera every single day. Amy is currently the Features Editor at Amateur Photographer magazine, and in her increasingly little spare time works across a number of high-profile publications including Wired, Stuff, Digital Camera World, Expert Reviews, and just a little off-tangent, PetsRadar.