Apparently, the Olympus E-M10 will be announced, along with a new, more compact kit zoom, and a 25mm f/1.8 lens, on the 28th/29th, depending on your location.
It appears to be a cut-rate E-M5 in a smaller body lacking weather-sealing, and will not replace the E-M5.
Since the E-M1 upset so many because it was supposedly huge (What do you do when you want to replace a dSLR (in this case, the E-5)? You make a larger small body, right?), Olympus is also going the other way making a more tiny body. I'm not sure whose male hands are so small but apparently there are many out there who already have micro Four-Thirds equipment.
Is the E-M10 a stab at the Panasonic DMC-GM1? I don't think so. I doubt this will be small enough to fit into a pocket, any more so than the E-PM2. It's more likely to be a stab at the GX7 or the G6, and at least, Panasonic acknowledges the PAL side of video.
What's curious is that it will likely undercut the E-P5's price a bit while providing an Electronic Viewfinder. So, the fastest shutter speed is really the only thing other than style that the E-P5 has.
Will this change Olympus' market penetration? I hope so, but I'm not holding my breath. This certainly isn't something I would buy but I can see the performance being competitive against low end dSLRs.
Cheryl Tiegs, then a supermodel, introduced the OM-10 in advertising at the time. I'm not sure a supermodel can help. Kim Tae-Hee, a Korean supermodel has already been involved with micro Four-Thirds but I have my doubts that it would help, even though Samsung isn't making anything truly compelling in mirror-less camera bodies.
Update 2014.01.29: So, it's not actually the greatest camera body of all time. Surprised? Of course not. It is a bargain, though.
Olympus has brought some technology down a price point or two. Namely the best processing engine Olympus has, and a better rear display. It also has 3-axis image stabilization, which is one axis better than the E-PM2 and E-PL5/E-PL6. The 81 focus points sounds a bit better than 35. Hopefully, they're arranged nicely across the frame.
The huge question is: Will people buy it?
During the holiday season, I saw various low end dSLRs offered for US$399.99. It didn't matter that they were three years old. Many of the people who would buy them just want a "professional" camera, and nothing says professional more than a cheap dSLR, correct? Why spend US$6000 when your (photographic) friends can't tell the difference?
The trouble with this mindset is that until dSLRs are completely gone, mirror-less system cameras may never have a full shot at the market. Of course, the high entry price says loads about it, and Olympus and Panasonic have made it clear that they want to make a lot of money from it, rather than trying to sell billions with very little profit, as is done with the cheap dSLRs.
Update 2014.02.10: I've seen some work done with it, and I'm impressed. It's apparently better than the E-M5 in many ways, despite the budget-ish price. For those who don't photograph in the rain, it shouldn't be a problem. For those who want to photograph in the dark, they might want to try it first. The TruePIC VII processor seems to find better image quality from the sensor also used in the E-M5.
I'm wondering what will happen to both the E-M5 and the E-PL5/E-PL6 now. With a price just above the E-PL5/E-PL6, is the E-M10 just another option or does it confuse people? You can use one of the electronic viewfinders with the E-PL5/E-PL6 but would you rather have everything in one box, so you don't forget the viewfinder? The E-M10 is also cheaper than the E-PL5/E-PL6 with VF-4, though the E-M10's viewfinder isn't nearly as sophisticated.
Update 2014.04.03: Apparently, quite a few people are impressed with the E-M10 body. They like that it's smaller than the E-M5 and less expensive, since it's not weather-sealed. I can appreciate the step forward, but I wonder where that leaves the E-M5. I see a lot of comments about price, and many of the same people commenting seem to have the least expensive lenses that they can find, which aren't weather-sealed, so for many, it's likely not a problem. I'm thinking that the current count of weather-sealed lenses is up to 5, which isn't much considering that the majority of Olympus' Four-Thirds lens catalog was weather-sealed.
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