This post is the response to - Nokia launches 808 PureView with 41megapixel camera
The megapixel myth
Megapixels are the digital camera market's equivalent of horsepower and megahertz—a single metric that consumers and marketers latch on to tenaciously, despite the fact that it hardly describes overall performance.
Over the last several years, camera manufacturers have been pumping up the megapixels on each successive camera model, regardless of whether such increases offered any real benefits (hint: they usually did not).
How many megapixels is enough?
The truth is, though, that 6MP is enough to make a very nice 8 x 10" print—in fact, I've seen very nice, though soft, 8 x 10" prints from early 3MP DSLRs. More pixels can mean larger prints or more room for cropping. But who's making larger prints, other than professionals? And with compact cameras offering up to 24x zoom ranges, exactly how much cropping would someone need?
Along with the number of megapixels in a sensor, other factors affect the image quality of a camera. The dynamic range, or the range of tones the sensor is able to reproduce, is a rather important one. A high-pixel-density sensor's ability to perform well in low light, which we mentioned above, is another. But beyond the sensor itself, the two other major factors that come into play are the on-board image processing hardware and the camera's lens. This is one reason SLRs have had a resurrection of sorts lately: DSLRs offer better lenses, larger sensors, and often better image processing.
So, manufacturers are starting to focus more on features like wider or longer zooms, higher-quality lenses, low-light performance, dynamic range, and high-def video capabilities. We've already seen a pretty significant competition between Nikon and Canon for the high-ISO crown this past year or so, and the improvements gleaned from high-end DSLR designs are trickling down to compact cameras. Further, Fuji has recently begun focusing marketing on dynamic range with its new EXR sensor technology. And some compacts, such as recent Pentax and Canon superzoom models, as well as DSLRs, like the Canon EOS 5DmkII or Nikon's D90, have already begun to exploit digital sensors to capture HD video.
Though focusing solely on the number of megapixels made marketing and buying digital cameras easier, it seems that we are at a major turning point in the direction of further developments in digital camera technology. Much like cars have shifted from horsepower to safety and efficiency, and computers have shifted from mega- (and giga-) hertz to multiple cores and... well, efficiency, digital cameras will shift toward other aspects that reflect the "bigger picture" of a camera's performance.
Source - Why we've reached the end of the camera megapixel race