Over the past couple of years we've seen camera manufacturers trying to strike the right balance between image quality and camera size, by fitting ever larger sensors in ever smaller cameras. The Panasonic Lumix DMC-GM1 is a mirrorless interchangeable lens camera which continues this trend, by somehow squeezing a Micro Four Thirds sensor into a body which is smaller than many compact cameras.

Featuring the same size Micro Four Thirds sensor (17.3 x 13 mm) as the likes of the Lumix DMC-GX7 and Olympus OM-D E-M1, the Panasonic Lumix GM1 should be capable of shooting comparable quality images as its larger brethren. Indeed it even takes the same lenses. But it's not just small for a Micro Four Thirds camera, measuring just 98.5 x 54.9 x 30.4 mm (3.88 x 2.16 x 1.2 inches), it's one of the smallest interchangeable lens cameras ever. In terms of miniaturization, it's right up there with the Pentax Q cameras, which have much smaller sensors.

The GM1's 16 megapixel Live MOS sensor is paired with Panasonic’s Venus Engine image processor and enables detailed images with an ISO range of 200 to 25,600. Burst shooting is possible at speeds of 5 frames per second if set to use the mechanical shutter, and 40 fps with an electronic shutter. A silent shutter feature also allows users to capture images in situations where the traditional click might be frowned upon.

Autofocus is dealt with by a contrast AF system with 23 points, and Panasonic claims the camera is capable of speedy focusing even in low light situations. There's a handy Focus Peaking function available in MF and AF+MF modes. The Panasonic GM1 shoots Full HD 1080p video at 30 fps and this increases to 60 fps at 720p. This being 2013, the camera also features built-in Wi-Fi for sharing images and video, as well as remote shooting via an iOS or Android device running the respective app.

A magnesium-alloy shell with aluminum dials and buttons should give the (slightly retro-styled) camera a solid-feel and physical controls include a mode dial, a switch for jumping between single, continuous and manual focus modes and a function button. All of which should keep enthusiasts happy given the overall small size of the device and lack of space to fit much more.

On the rear there's a three-inch touchscreen with 1,036K dots for composing and controlling shots. Space being at a premium, there's obviously no optical or electronic viewfinder, and it's worth noting that because there's no hot-shoe, it's not possible to add an external one either. There is however a pop-up flash should you need a bit of extra light.

Released alongside, and bundled with, the Panasonic GM1 is the LUMIX G VARIO 12-32mm F3.5-5.6 lens. Giving a 35 mm-format equivalent focal length of 24-64 mm, the retractable-type zoom unit is made up of eight lenses in seven groups, including ED (Extra-low Dispersion) glass for minimizing chromatic aberration. Seven blades give the aperture a rounded shape which should also produce a smooth out-of-focus blur when shooting at larger apertures.

The lens also boasts MEGA O.I.S. (Optical Image Stabilizer) to make it easier to control shots with slower shutter speeds, and an inner focus drive system and stepping motor for smooth and silent operation whether shooting stills or video. While the new lens uses the traditional Micro Four Thirds mount, it's been specially designed to fit the size of the GM1 with a smaller diameter. Many Micro Four Thirds lenses are taller than the body of the Panasonic GM1.

This is where the discussion and boasts of small size get interesting. Because the GM1 has a relatively large sensor, its lenses still need to be big enough to cover that sensor with an image, while those designed for the smaller sensors of the Nikon 1 or Pentax Q can be smaller. This means that while the camera itself is pocketable, many of the lenses you might want to use with it certainly won't be.

The Panasonic GM1 will be available in November, bundled with the kit lens, for a price of US$750.

Product page: Panasonic Lumix GM1