The market is flooded with an excessive range of camera categories, and this new category I think is an unnecessary bridge. I don't think the marginal size reduction improvement qualities of the smaller sensor can redeem itself for the optical limitations. Right now image resolution is more a bottleneck of the lens than the sensor and as such, the sensor size is itself a statically limiting factor. They may have excellent s/n ratio granted by the algorithms of the Expeed, but I can't see that propelling itself into APS-quality image category.

The ability to attach SLR lens seems a pointless novelty, why carry around a lens and use such a small section of its image circle? And if it's an APS lens, then it is probably fairly wide angle: at which point - why bother?

My sentiments are not all that different from my sentiments on the Pentax Q. They aren't being aggressive enough with their pricing as well (albeit better than Q) - they need something to sit at $500, to compete with the slew of M43 and aps bodies out there and the current E-PL3/E-PM1/GF-2 and NEX 3.

I'm honestly disappointed that they didn't go APS. I don't know how they plan to compete when their gear seems so run of the mill, maybe they can fly to success on their name brand alone. They're facing a pretty intense battle with M43 and NEX as they are very well established mounts already. Hopefully the consumers don't let the name brand give them a pass.

But then I'm just a cup half full kind of guy! ;) ahhh.. Maybe I'm missing something or failing to see a market that is thirsty for marginal incremental improvements on the size of a CSC camera.