I have a dream that one day, there would exist a digital compact camera that's as versatile as any entry-level DSLR. This compact camera should focus as quickly as a Canon EOS-1100D, while providing image quality comparable to the Nikon D3100. When equipped with a 28 ~ 112mm equivalent zoom, it should be about the size as an Olympus XZ-1. It should be quick and nimble, featuring minimal shutter lag and excellent shot-to-shot time. The control should cater to the advanced amateur, meaning it ought to have loads of dedicated buttons and dials to allow quick access to frequently-used functions, such as exposure compensation, white balance, and ISO. It should look good, like a Leica M8 or a Fujifilm X100.
Last but not the least, it should be cheap. Preferably under $500USD, tax included.
I thought the dream had become a reality in '09, when Panasonic rolled out the Girlfriend One. The GF1's body certainly was slim enough, but alas, with its 14 ~ 45mm (28 ~ 90mm) kit zoom attached, the camera simply ceased to be pocketable. During the course of the next two years, Panasonic continued to further shrink down the size of the body with the GF2 and GF3, but the lens didn't budge, making the miniaturization effort more or less moot.
In late 2011, Panasonic announced the Lumix X 14 ~ 42mm (28 ~ 84mm equivalent) pancake zoom. When I saw the press release, I thought I heard the choir of heaven sing. Then, a few weeks later, Panny announced the GX1, a camera designed specifically for the enthusiast market. At that moment, I finally understood what Beethoven (or Schiller, whatever) meant when he wrote: "Above the starry canopy, a loving father must dwell."
So, this is how the camera looks. The entire system tips the scale at 413g, and with the lens retracted, it would slip easily into a coat pocket. Alright, so it's not as light as a Oly XZ-1 (275g), but compared to a typical DLSR (~1.1kg), the GX1 is a revelation in portability. No longer do I need to wear a brick around my neck in order to get decent pics. This is a wrist camera through and through.

Thanks to the meaty rubber grip, the GX1 is a joy to handle. It's like the designer wants you to put it to work. There is no doubt that it feels chunkier than your normal average compact, but the difference isn't so great that it discourages you from wanting to carry it around. The control layout takes awhile to learn, as there is a fair number of customizable buttons and menus you have to program. Once that's done, however, you would rarely need to dive in the main menu.
A word about the auto-focus. To put it succinctly, it is unbelievably fast. Okay, D3s owners will want to laugh, but honestly, consumer-grade DSLRs have zero advantage over the GX1 in terms of AF speed. However, as with all contrast-detect type AF systems, focus tracking isn't so good. But heck, I am not a sport shooter, so no biggie. Shutter lag is almost non-existent; you press the button, it fires without hesitation. Add it all up, and what we've got here is a well oiled snap-shooting machine. When it is put to action, I find myself blowing through hundreds of shots in a breeze. Not all shots are masterpieces, mind you, but this behavior demonstrates what an awesome shooter the GX1 really is.
As for image quality, I have mixed feelings. For the record, I hate the way it renders JPEGs. Using the camera's default setting, JPEGs are over-processed and underwhelming. I have a hard time understanding why Panasonic would choose to apply such heavy-handed noise reduction to images produced by such a large sensor. I guess the only plausible explanation is that Panny employees are all watercolor enthusiasts. Anyways, other processing parameters, such as contrast, sharpness, and saturation, are all overcooked. It took me weeks to find a setting to my liking.
That said, the sensor is quite capable and can produce very good image quality up to ISO1600. I find ISO3200 to be the final threshold; anything beyond that, use at your own risk. But you know, I had hoped that the GX1 would perform as well as a Canon EOS-5D at base ISO, producing results with a certain silky sheen that's only seen on images made using full frame cameras. Sad to say, no such luck. In the end, the images' "look" has more in common with compacts than with FF cameras. I am a little bummed.
Test shot at ISO1600
100% crop. Oh yeah, that's some silky smooth handheld high ISO action, baby!

'Mo ISO1600 action
ISO1250. AWB performance is absolutely amazing under artificial lighting.
ISO160. Yeah, I know. Ain't got that FF "look".
ISO250. Thanks to quick AF and low shutter lag, this camera captures action quite well.
ISO160. Shooting kids used to be a job reserved exclusively for the DSLR. Now, the GX1 can do it, too.

Okay, so the camera shoots good, real good. But there is a serious defect with the whole system. Had I known beforehand the existence of this nasty issue, I would not have smashed the piggy bank.
The problem lies with the pancake zoom, and it is this: If the lens is set to the long end (42mm), and the shutter speed falls anywhere between 1/60 and 1/250, there is a 95% likelihood that the image will be blurry. This happens regardless of whether IS is turned on or off. As a matter of fact, things look WORSE with IS turned on.
Let's look at a test image
100% crop. This is very bad.

Another example. This is even worse

Another one. We are now seeing doubles

If the shutter speed is 1/320, then everything is razor sharp.

DPreview duplicated the issue, and they saw the same thing with numerous examples of the this lens. I exchanged mine, only to find out that the replacement unit also exhibits the same problem. This can only mean one thing - Panny has absolutely no idea how to fix this. I guess there is always the option of returning the lens and get a standard non-pancake kit zoom, but that would kill the system's pocketability, and I am just not ready to accept that. So now, I program shutter priority AE to 1/320, and whenever the zoom is set to 42mm, I turn the control dial from Program to Shutter Priority, thereby dancing around the affected shutter speed range.
I know. It's lame. This workaround pretty much ensures that you cannot use the long end of the zoom for indoor shooting. This lens isn't that fast to begin with (f/3.5 ~ f/5.6), and losing two stops is a kiss of death. Bear in mind that a number of other Panny m4/3 bodies (GF3, GF5, G3, GH2) also ship with this lens, so if you are considering buying one of those systems, you must know what you are getting yourself into.
So, at the end of the day, only a part of the dream has been realized. Thanks to its compact body, the GX1 is arguably more versatile than a normal average DSLR, and it can shoot almost as well. It could be a little more compact, but heck, for most intent and purposes, it's small enough. Then there's the matter with its price tag. It's a little on the spendy side, but the comforting thought is that at least it isn't totally out of whack like a Fujifilm X-Pro 1 or Leica M9-P.
But I have to say, the blurry issue vexes me a great deal. It's such a shame. A great camera system almost ruined by such an avoidable oversight. If the god of photography is truly kind and merciful, he'd put gun to Panny's head and force them to release a firmware that would fix the issue once and for all. However, given this lens has been on the market for over 6 months, and there is zero acknowledgment from Panny, divine intervention is a little too much to hope for.
So, help me, Olympus, you are my last and only hope.
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