I carry an iPhone 4S everywhere I go. The camera on it is as good as most (if not all) compact cameras. In my opinion, the 1" sensor is truely another marketing scheme to prolong the death of compact cameras. But hey, who am I to stop the mighty marketing machine? People will love it and be happy to pay up. Besides, "one-inch" sensor sounds pretty awesome to the ears of the untrained. People like round numbers.
I am not saying larger sensors are not superior. I'm just saying it is the skill of the shooter that matters more than the sensor size. Check this out: http://connect.dpreview.com/post/2863436371/leaving-my-dslr-at-home-iphone-experiment
zakk9: I don't understand this. The power zoom is activated by a physical switch on the lens. Why wouldn't that work on the older cameras? I can see that the added functionality listed above would be affected, but nothing else, unless Panasonic has disabled it on purpose and made activation of the switch dependent on the firmware upgrade. That would be evil, wouldn't it?
The power zoom works on all Micro four thirds cameras, even on Olympus. Only the additional functions, such as focal length dislay, require the firmware update to work. This is my take on the press release.