"Sources aware of Google's plans have confirmed to us that the search giant is currently testing a new version of its camera app that will sport a refreshed UI, a background-blurring effect for portrait shots and improved panorama and Photo Sphere modes. As part of its overhaul, we're told that Google has finally fixed issues with the default camera's photo framing, allowing users to snap images with a new 100 percent no-crop viewfinder."
"The company is also said to be making the camera app more extensible by opening support for third-party filters. This will allow developers (and Android enthusiasts) to create and import custom effects inside the stock camera app. The camera app's portrait skills may see some improvements too, with the addition of a new lens-blur mode that will take photos with a shallower depth of field, mimicking the effects you'd typically see in Nokia's Refocus app and HTC's new One. New high-resolution panorama and Photo Sphere modes have also been added, improving the quality of your sweeping shots."
This is much needed on Android. It's arguably its biggest weakness in the age of using mobile phones as primary cameras. The iPhone succeeds because Apple does a lot of work on the low-level software; the hardware is very good, but not best-in-class vis-à-vis Nokia's PureView technology.