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This paper presents the implementation of a sensor-shift image stabilization system for a small form factor camera. Image stabilization is a family of techniques for reducing image blur resulting from minute camera shake due to hand-held shooting, thereby allowing the use of shutter speeds slower than values normally required to obtain sharp images. A prototype sensor-shift type image stabilizer module developed for a camera mobile phone is introduced and a digital control system as a part of the image stabilization system is designed and implemented on an 8-bit microcontroller through integer arithmetic in the C language. This paper focuses primarily on issues that need to be taken into consideration for fixed-point implementation of the digital controller. Experimental results are presented to demonstrate the performance of the implemented sensor-shift image stabilization system.