The thinking went something like this: Most people buy P&S cameras and hence there are more R&D dollars to develop them. P&S cameras were improving at a faster rate than SLR cameras and you could see the day when the quality of the images and auto-focus systems would mostly equal that of the expensive cameras. Back in film days there was no difference between the light sensitivity of P&S cameras and SLR cameras since they both used the same film.

Cannibalization from the low-end is a common phenomenon in technology. As technology improves and prices come down, the low end, mass market product eventually satisfies the performance needs of most applications, marginalizing the high end product. I saw this painful effect first hand when I worked for Silicon Graphics. Every year the PC graphics boards satisfied the needs of more and more people and the market for graphics workstations shrunk.

Digital Photography reset the camera market. Camera prices more than doubled overnight. In 1999, entry level P&S cameras were $700. Digital SLRs that could rival film were $10,000. For all the enthusiasts moving over from digital, there were some painful choices to make. Digital had clear advantages in immediacy and the incremental cost of shooting, but most enthusiasts were priced out of the cameras that could deliver image quality equal to their $700 Canon A2E film camera.

As prices dropped and technology improved, Digital SLRs became the tool of choice for the enthusiast. Starting with the Canon D30 in May of 2000, which was priced at $2400, enthusiasts gradually started buying digital SLR cameras.

Digital SLR cameras came down in price over the years. Now once again, digital SLRs cost approximately what prosumer film SLRs cost in the 90s ($700-$900). In the last few years DSLRs were one of the fastest growing segments of the digital camera market. Only a digital SLR could offer the shot-to-shot time, auto-focus speed, and low light performance that enthusiasts demanded.

But there is no fundamental technological advantage to the SLR format where you look through the lens through a pentaprism equipped with a mirror. In fact, the whole concept of having a mechanical mirror that pops up to expose the sensor is a complicated mechanical contraption that seems almost odd in a modern digital camera. Furthermore, the SLR format has some disadvantages, including size, weight and frame rate (you have to move that mirror out of the way).

Why can’t point and shoot cameras produce images that are as good as an SLR in a smaller form factor? Well the answer is that they can. Panasonic and Olympus have led here with the introduction of the micro 4/3rd format, which is really nothing more than a line of point and shoot cameras with interchangeable lenses and big image sensors.

The Panasonic GF-1, which I own, is the first camera that makes me want to leave my 4.5 lb Canon 5D Mark II with 24-70 f/2.8L at home in some situations. Not all situations mind you. But some. the GF-1 is 1lb with its 20mm f/1.7 lens. It can take a photo in low light. It autofocuses well. Challenges remain. Auto-focus speed is not equivalent to what a DSLR can deliver. Low light performance is not equivalent to a Canon 5D Mark II. But you can see where this is going.

DSLRs are not getting better at any significant rate. They are already amazing. The gap between P&S camera performance and DSLR performance is closing. When P&S cameras deliver anything close to the performance (image quality, low light performance, auto-focus speed) of SLR cameras, the market will once again shift back to point and shoot cameras.

Why? Because consumers mostly don’t care about tinkering with settings (aperture, shutter speed). They care about image quality, auto-focus speed, and low light performance. Once point and shoot cameras close the gap, the market will shift away from the heavy, clumsy digital SLR cameras.

I believe that when we look back, Panasonic’s GF-1 will be seen in the industry as heralding the second rise of the point and shoot camera. In five years, I predict the DSLR market will actually have shrunk relative to the market for compact, 1 lb point and shoot cameras with digital viewfinders and amazing performance. These cameras will be under $400.

And after that? well, technology is merciless. Don’t count the smart phones out. It will just take a long time before they satisfy the performance needs of the mainstream.

What first strikes you about the camera is that it looks like an old Leica rangefinder. it has more heft and a more traditional design then a Canon digital elph. it also has a hot shoe, which seems a waste of space. If I am going to put an external flash on the camera then I will just carry the SLR.

Indoors, shooting with available light you need a low noise sensor and a fast lens. The LX3 has one of those; the f2.0 lens is fast enough that you can often shoot at ISO 400 and below, where the noise is manageable. But you pretty much need to stay at wide angle (24mm equivalent) to avoid having to use ISO800 indoors. The lens slows down to f2.8 when zoomed. At f2.8, typical home lighting requires ISO 800 or higher, something my digital SLR handles just fine but the LX3, not so much. The LX3 is supposedly less noisy than most of its competitors at ISO800 but compared to a digital SLR like the Canon 5D or 40D, there is a ton of noise.

Where does that leave me? I like the camera. It fits very nicely between the Canon 880IS that I carry when skiing and the digital SLR that I take out when image quality is my number one concern. I see myself using it when hiking, when going to indoor parties and other casual events. I do wish the camera had a lower noise sensor, which means that I wish it had a physically larger sensor with a lower pixel density. But for some reason, manufacturers don’t want to build a compact point and shoot around the sensor found in the Canon 40D. In the interim, this camera is probably the closest thing to my dream camera.

The Canon 880IS is still my choice when i want to carry a camera that will disappear entirely when not using it. The LX3 certainly won’t fit in your pocket. They know that. It has a full strap like an SLR. The Canon 880IS has just a wrist strap.

Oh yeah, the camera takes video too. performance in 4×3 aspect ratio mode, where it shoots 30 FPS, is excellent. Performance at 720p, 16×9 ratio, 24 FPS (the other option) is not quite as good. there seems to be some stuttering and motion does not seem quite as smooth. There are more artifacts in the video at 720p too to my eye. Both modes produce motion JPEGS in a quicktime container, a pretty dense format with lots of wasted space, but Phanfare’s video conversion takes care of that for me.

You can’t zoom while shooting video, pretty typical for the genre. But I don’t find that a big problem.

My biggest complaint about the camera so far is that i can’t change the ISO without going into the menus, but I read that I might be able to re-assign a button to do that.

New photos you take on your iPhone are integrated directly into your collection. With this new version your iPhone is transformed into a managed wireless digital camera. Your whole collection appears on the camera and new content is automatically uploaded to your account in the background.

This new version of the Phanfare iPhone app is available for the iPod Touch as well. While the touch lacks a camera, you can still view your photo and video collection via the app.

For many shooters, the iPhone is only one of the many devices they use in their photographic life. Phanfare brings all the content together, viewable from the web and on the iPhone. We also support TV viewing via our media server software combined with the PS III and Xbox 360. We would love to be in TVs directly (if you manufacturer TVs, contact us – we would be happy to provide API keys).

Overall, the platform lives up to the hype. The touch interface is ground breaking and the UI sets the bar to a new level for mobile devices.

Our goal with the iPhone is to transform it into a full-featured wireless camera. Most of that is just a small matter of programming. But there is one area where we and every other photography app is hobbled, and that is in the camera controller.

If you use the built in camera on the iPhone, it has a shot to shot time of about 3 seconds. This is not groundbreaking compared to a point and shoot camera from Nikon or Canon, but it is tolerable for many situations. Unfortunately, we are not allowed to use the same camera controller that Apple uses for its built in camera. Instead, we are forced to use a different camera controller class (this is all software) that calls the real camera controller behind the scenes. The result is awful.

Compared to the native camera controller, the one we must use has a shot to shot time of 14 seconds. You can background some of that and get it down to 9 seconds, but do that at your own peril because the camera controller also uses a lot of memory and as any iPhone developer knows, if you run out of memory, the operating system kills the app.

The shot to shot latency is not the only issue. We are also forced into an “official” workflow for the digital camera that involves a common interface that says “use photo” and “retake” after each photo. The built in camera app that Apple wrote that uses the native camera controller skips that annoying step. We can’t skip it.

The solution is to let developers use the native camera controller. Sure there is no default shutter effect or shutter sound, but that is fine with us. We can innovate there and have our own unique experience.

The iPhone is the first smartphone with a UI so good that it could possibly replace the point and shoot camera for many situations. But to realize the full potential of the platform we must be allowed to use the native camera controller libraries.

We have also released a new mobile viewing experience that targets the Safari web browser built into the iPhone.

Here is a demo of the new Phanfare iPhone application and the mobile viewing experience.

The Phanfare camera application turns the iPhone into a connected digital camera that takes the PC out of the loop for uploading and sharing. Users enjoy the convenience and portability of the iPhone with all the benefits of cloud-based storage and sharing. After you take a picture, you can instantly add a caption, add the photo to an existing album or create a new album without ever leaving the application. Here is a demonstration of the new iPhone app.

For consumers, digital photography was a huge step forward over film, but uploading digital photos to a computer is just too complicated. The Phanfare iPhone app gets the computer out of the uploading loop and makes digital photography significantly more convenient.

They were interested specifically about how Phanfare provides secure photo and video sharing for families but I spoke more broadly about what we are doing these days. They were friendly enough to just go along with the flow.

Andrew