Length:: 1:26 Mins
The video accompanying this review is some footage taken entirely with the LX7.
The advanced compact camera is a recent invention that aims to be a replacement for your big, heavy DSLR, or to replace your cell phone camera if you are used to something smaller than a DSLR, but want DSLR quality. All advanced compact cameras allow you to output RAW data, which is a big deal if you are into photo editing or advanced photography.
There are many other advanced compacts on offer (Olympus XZ, Fuji X series, Canon G1, Sony RX100 or Nikon Coolpix A), but the LX7 has four major things that sets it above the competition...
The first is price: the LX7 is amongst the cheapest advanced compact you can buy.
The second is the fastest glass: it is not constant aperture, but beats the competition hands down. Although the LX7 has a poorer high ISO than the competition, the fact that you have very fast glass means that you rarely go above ISO400/800, so it's a non-issue in most cases. The camera also has a very good macro function: it can focus as near as a centimetre away. The lens comes with in-lens optical stabilisation (many other cameras have only electronic compensation, so optical compensation is a pretty big deal at this price point).
Third: video. Although the LX7 has a small sensor, this is an advantage in video (and also for that matter, in IR photography). You get the sharpest video because the sensor does very little line-skipping and has far fewer sensor filters. The camera also comes with inbuilt ND filters, which is essential for video (unlike in stills, in video, shutter is tied to frame rate so you control exposure via an ND).
Fourth: you can add a filter thread to the lens, available separately from Panasonic (or for peanuts from eBay). This opens up all sorts of advanced use: additional ND filters for advanced video, IR photography and so on.
Lower zoom range than some of the competition, and only 10MP. It also seems to cook the RAWs a little, but that is common to all advanced compacts - at the very least they all seem to do some in-camera lens correction. Oh, and it often overexposes a little but there is an easy workaround - set exposure compensation down by 1/3rd of a stop. The optical compensation is designed for stills only, so you can have issues with it if you do video panning (it tries to keep a still image rather than damping video movement).
See the attached video for a sample of my video production using only the LX7. This is better video than the competing Sonys (which everyone seems to want right now for stills, but their video is soft). See also attached image sample in the product sample images.
To conclude: a very competent and keenly priced camera if you are looking for a compact DSLR replacement or something better than a cell phone. Pocketable and portable, takes excellent photos and video and can be used for advanced photography/photo editing via RAW output or attached filters. Superseded as of this writing by the Sony RX100 (as are most other advanced compacts!), but far cheaper and better for video... and for most people the LX7 is probably better value for money. I'd also recommend anyone new to DSLR stills/video to think about getting an advanced compact rather than an entry level DSLR - the advanced compacts are cheaper as you don't need extra lenses, and they will still be useful to you once you go on to buy a better mid-level DSLR.
*** Update Jan 24 2014 ***
Given some of the discussion comments made for this review, its worth noting that advanced compacts are not really point and-shoot cameras out of the box. The more normal use case for any advanced compacts is one of the semi-automatic or manual modes (the P, A S and M modes). I use A (aperture) and M (manual) modes almost exclusively, and this review is written on the assumption you will not be using full auto or 'scene' modes.
One of the downfalls of the Panasonic LX7 is that the auto and scene modes are not that good out-of-box and do need tweaking. If you want a dedicated and simple point and shoot and do not want to mess about with camera settings, aperture, shutter and RAW editing, then you may be looking at the wrong camera (don't worry if this is you and you have already bought the camera, as I give a fix below).
In particular, the i.ISO (Intelligent ISO) ISO setting is useless except when you are shooting fast movement in good light (such as the kids playing in the garden). If you use i.ISO indoors, you will get tons of noise because it will select far too high a shutter. If you must use the camera in a point-and-shoot mode, a better option is to follow the steps below:
1. use P Mode (via the mode dial at the top),
2. use auto ISO (ISO button > Auto ISO), and then set the minimum shutter (Menu > Camera 3 > Min. Shtr Speed) to 1/30 or 1/60 (1/30 is less noise but greater chance of blur, 1/60 is more noise, less chance of blur).
3. Use the stabilizer (Menu > Camera 4 > Stabilizer, set to ON).
Unfortunately, knowing why you are making this sort of setting does require a fairly good understanding of the relationship between aperture, shutter and ISO, and Panasonic assume buyers of this camera don't need telling this sort of thing as the LX7 is an advanced compact!
The LX7 is, however, the cheapest quality photography enthusiast camera out there in my opinion. If you are looking to take snapshots, then I would recommend against the LX7. If you want to get deeper into photography technique, and are weighing up between an entry level DSLR and advanced compact, I'd advise the advanced compact as it will be better than any entry level dSLR+kit lens offerings (an entry level DSLR only becomes better once you ditch the kit lens and get a range of better lenses... save your money and get an advanced compact to start, then go straight to a mid level DSLR if the photography bug bites you). The advanced compact is also more portable than a full dSLR and makes an excellent 'dSLR replacement' for existing mid and top-end dSLR owners with tired arms.