Camera based on a production LX3 with V1.0 firmware
(White balance section updated to reflect V1.1 performance)

Panasonic's LX series has always been home to the company's most ambitious compacts, offering a range of photographer-friendly features in a small, stylish and solid body festooned with external controls. It's been two years since the launch of the LX2 and the market has changed a lot in that time - the level of features offered even on inexpensive models has grown and the cost of all cameras, particularly DSLRs, has fallen drastically. Both of these trends risk reducing the potential market for premium compacts if their features are available on cheaper compacts, and much better photographic tools (in terms of flexibility of purpose and image quality) are available for only a little more money. So the LX3, more than its predecessors, has to play to its strengths - it needs to offer some of the best compact camera image quality, a good degree of user control and a body that is more convenient and pocketable than DSLRs can be.

And Panasonic seems fully aware of these challenges. When announcing the camera, the company pointed out that more pixels on the same sized sensor does not always result in better image quality and described its approach with the LX3 as: "boldly reversing the industry trend of pushing toward ever-higher pixel counts." It's an admirable position (though one that would be easier to acclaim if the company hadn't, on the same day, released one of the most pixel-dense cameras we've ever seen), and one that seems promising - the benefits of newer sensor and processing technology without those advances being strangled by the downsides of smaller pixels. (And we believe that if you offer more pixels with the hard drive clutter and slower camera operation they bring, then those pixels must be good at the pixel level, otherwise, what benefits do those additional pixels bring?)

Headline features

• 24mm wide 2.5x optical LEICA DC lens
• F2.0-2.8 maximum aperture range
• MEGA O.I.S.(Optical Image Stabilizer)
• Venus Engine IV
• Joystick-operated manual control
• Large 3.0 460k dot LCD monitor
• Raw and JPEG recording modes
• Up to ISO 3200 sensitivity
• Up to 1280x720 (30 fps) pixel movie capture
• Manual exposure and focus options
• 1/2000th to 60 sec shutter speeds
• Available in black or silver

LX3 vs LX2: main differences

Although the outward appearance hasn't changed that dramatically, the LX2 and LX3 are very different creatures. The the easiest thing to miss about the LX3 is its lens - a part of the specification sheet that is sometimes easy to overlook as a string of numbers. With the LX3 it's really worth spending a moment thinking about it: starting at 24mm equivalent is pretty unusual in a compact camera. Offering an aperture range of F2.0-2.8 is extraordinary. But to combine the two and include Image Stabilization is simply astonishing - this is not an everyday lens and it's something that defines how the camera behaves and what it can be used for.

To put that aperture range in perspective, this means it's one 'stop' faster (brighter) at the wide end and over 1.5 brighter at the long end than the F2.8-4.9 lens fitted to its predecessor. And this means that you can get the same exposure using the same shutter speed but using a lower ISO setting than with the older camera.

Beyond that, there the new, higher-resolution rear screen that conforms to the more traditional 3:2 aspect ratio, rather than its forebear's 16:9 unit.

The other differences are:

• Similar pixel count sensor (10.1 vs 10.0 MP)
• Venus Engine IV (vs Venus Engine III)
• 3:2 aspect ratio 3-inch screen (was 2.8-inch 16:9)
• Flash hot-shoe
• Threaded lens barrel for adding optional conversion lenses or filters
• USB 2.0 Hi Speed interface (at last!)
• More internal memory (50 MB)
• 720p HD movie mode now at 30fps
• Closer minimum focusing distance: 1cm, rather than 5cm
• Faster continuous shooting (2.5fps for 8 frames, cf. 2fps for 5 frames)
• Separate component video out (for HD playback)
• Improved battery life
• Minor control and interface changes

Multi-aspect ratio

Roll your mouse over the tabs to see the way the difference aspect ratios are taken from the sensor or click on the diagram to download the overlaid versions.

The LX3 does away with its predecessor's unusual 16:9 aspect ratio sensor, instead using a more conventional 3:2 sensor but then using only a crop from it, depending on aspect ratio. The key thing is that the LX3 even uses a crop from the sensor at 4:3 ratio, rather than using the entire sensor. Although this may seem perverse, the result is that the lens offers the same diagonal angle of view regardless of selected aspect ratio, making it much easier to get a feel for the behaviour of the lens. It also means you make the most of the sensor's area, getting similar pixel counts in all modes.

• Good image quality at low ISO settings
• Exceptionally bright F2.0-2.8 lens
• 24mm wide angle
• Decent high ISO performance (up to ISO 1600)
• Unique choice of aspect ratios at a consistent angle-of-view
• Comprehensive photographic control
• High quality construction with attractive design
• Automatic correction of chromatic aberration
• Feels fast and responsive
• High resolution screen
• Generally reliable exposure and focus
• Effective image stabilization
• Generally good user interface
• Raw mode & fully-featured RAW conversion software included
• Plenty of in-camera control over image parameters
• Good battery life
• Well priced (compared to its peers)
• Easy to use

• 60mm telephoto will be restricting for some
• Noise reduction can impact on low-contrast detail
• Underpowered flash
• Auto flash keen on using 1/30th second shutter speed (but keeps ISO down)
• Dissappointing white balance performance (though has a fine-tune option)
• Occasional dynamic range problems in very contrasty scenes
• Controls awkward for those with large fingers

The LX3 is an example of a species so endangered that the we were beginning to worry it had become extinct - a compact camera that photographers can get excited about. Panasonic has included a large degree of direct control, classy styling and, more importantly, a specification that goes beyond the unthinking 'larger screen and more megapixels' trend.

It's hard to tell what we're more impressed by - the ambitious lens or the decision to sit back and spectate during this round of the megapixel race. If pixels aren't just to become clutter on your hard drive, they must contain useful information and we've seen too many compact cameras that produce images that need to be down-sized to bring them up to standard. The LX3 may not have the eye-popping resolution of some of its peers but instead it's one of the best high-ISO compact cameras we've seen.

And then there's that lens. Image stabilized, 24mm at the wide end of things and offering an F2.0-2.8 maximum aperture range that gives you the choice of shooting at lower ISOs than its competitors. It's a feature that really sets the LX3 apart, even amongst cameras aimed at keen photographers and, as DSLRs become less expensive, that's exactly what this camera needed. The only concern must be that the lens only extends as far as 60mm equivalent. This is pretty short by most measures and may limit the cameras appeal, depending on your shooting needs (it's great as a walkaround landscape camera for instance).

Beyond all the good intentions of the specifications, it's a camera that appears to directly address many of its predecessor's shortcomings. Noise performance is greatly improved and the level of noise reduction is much less destructive (and you can shoot in RAW if you're the kind of person who has a prefered noise-reduction method in post-processing).

The joystick is a nice idea that should make for an excellent user-interface but it's a bit fiddly. The user experience just isn't quite as slick as it could be if you want to regularly change settings. Panasonic's own G1 shows that it's possible to give a superior level of manual control using a similar number of external controls (perhaps we should start asking for a control dial like the G1 if there's ever an LX4). That said, you do get used to the LX3 and it isn't completely fair to compare it to a camera aimed at a different set of users - it's still arguably more pleasant to use than any of its obvious competitors.

White balance isn't the LX3's strongest point but there's a good degree of control if you're consistently finding that it's not giving the results you want (Or, again, you can shoot in RAW and process in the software that is supplied with the camera). And in most other respects the images are very good - automatic correction of chromatic aberration and sensible (if rather saturated) image processing mean a lot of time spent with the LX3 is time spent thinking - 'Oh, I'm quite pleased with that.' And that's the bottom line - it's a camera that encourages you to play, to experiment, to take photographs and one that rewards you for doing so.