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IS stands for Image Stabilisation. A technique to reduce unsharpness from camera shake. It's quite effective when longer shutter times are used (< 1/ focal length). The generic Canon approach is to built this mechanism into the lens. Other manufacturers built it into the camera (by slightly adjusting the position of the sensor). Often two modes are found on the lens one compensating just the vertical movement of the camera. This is used when you track a moving object with a intentional horizontal movement of the camera. The other mode compensates both horizontal and verical movements.

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Q: What does IS stand for with Canon cameras?
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