The E-P1 has undoubtedly created quite a stir as the first genuinely compact interchangeable-lens digital camera, but what does Olympus have up its sleeve for Micro Four Thirds in the future? We caught up with Akira Watanabe, product planning manager of Olympus's SLR division at the E-P1 launch event in Berlin, and asked him about the company's plans for the system.

The E-P1 will be the first of a range of Micro Four Thirds cameras from Olympus, says Mr Watanabe. Electronic viewfinders and more lenses (which could include more pancake primes) will be developed, he said, as he spoke to us about the company's plans and ambitions for Micro Four Thirds.

"We are now preparing for a future product with an EVF. But for this product [E-P1] we were concentrating on small size," he said. This, he explained, was because of how the company sees the market for Micro Four Thirds: "The idea of removing the mirror and shortening the distance back to the sensor dates back to 2002/01. The E-420 is the smallest DSLR in the world, it has good penetration into the young and the step-up [from compact camera] categories. We know that more than 20% of compact camera customers have thought about buying a DSLR but are put off by the size, weight and complicated operation."

And this is a market with huge potential - compact cameras outsell DSLRs by around 10:1, so 20% of the compact camera market is more than double the current number of DSLRs sold. Micro Four Thirds therefore won't necessarily cut into existing Four Thirds sales, he says: "We don't think one will shrink as the other grows - Micro Four Thirds will expand into traditional compact camera markets."

Watanabe concedes that other manufacturers are likely to enter the mirrorless system camera market however: "Within five years more companies will come, but we believe that, as these manufacturers enter the market, the market will grow." And when it does, he says, the Micro Four Thirds System will still have an advantage: "Logically, we can make cameras smaller than the competitors if they are using APS-C-sized sensors."

Watanabe explained the extent to which the company has gone to minimize size, including automatic correction of distortion: "We are doing distortion corrections. Panasonic is doing this and likewise we're doing the same to allow us to make the lens smaller." Optical quality is still fundamental to the system, though he said: "When it comes to picture quality - it's not about the sensor - it's the optical performance of the lenses that is most important to us. We are serious about improving noise though - with this model we brought in a new image processing engine that allows us to extend the sensitivity range to ISO 6400." And this isn't the only change it has brought: "The new engine is improved in terms of jaggy and false-color reduction, so we have been able to use a lighter anti-aliasing filter."

He then expanded on the company's lens strategy: "With this launch there are two lenses but there are also two adapters, to allow the use of all Zuiko Digital Four Thirds lenses with AF capability. We will also introduce an OM adaptor and expect third parties to make adapters for other types of lens." But the two lenses won't be the limit of the M-Zuiko Digital range: "When we launched Four Thirds we created a roadmap in response to calls from the market, we arranged them into a series of priorities and started to create those lenses. In Spring, we will launch at least a wide zoom or a high magnification zoom after that we will listen to voices from the market. If customers request prime lenses first, they'll be first on our priorities list."

These primes could follow the compact, 'pancake' design of the 17mm lens launched today: "this is our second pancake lens, following the 25mm F2.8 Four Thirds lens. The 25mm was very well accepted - better than we expected, so we will follow customer requests."

Interview by Richard Butler (our man in Berlin)

Click here to read our hands-on preview of the Olympus E-P1