last updated Wednesday, June 24, 2015
Color depth refers to the number of unique colors that a sensor can faithfully capture. Cameras with better color depth will demonstrate smoother transitions from one color to the next, and avoid "banding" in areas with subtle shading. (Blue skies are an example of where you might see color banding.)
Color depth is measured in bits, which is how your camera stores color information. A camera with 16 bits of color depth can accurately distinguish about 65,000 unique colors (2^16) while a camera with 17 bits could accurately capture about 130,000 unique colors (2^17).
More color depth is generally better, but you'll struggle to notice a difference between two cameras with less than 1 bit of difference. Color depth above 22 bits is considered excellent.
You may be familiar with 12-bit or 14-bit RAW files. This measure refers to the bits theoretically available to capture each of the red, green, and blue colors as seen by the sensor. In contrast, the measure we use shows the actual information available to capture all colors, at the camera's base ISO.