As I said somewhere Drew, 4/3rds is effectively a smaller "film" format than 35mmFF, and I don't think, however much money is thrown at it, they can hope to match the ultimate image quality.
If they try, and fail (and in my view they WOULD fail) they'll look stupid and kill the system.
They'd do much better to make a virtue out of a neccesity and say "here it is guys, the quality is as good as you will ever be able to use with current glasss technology, and you don't need a truck to carry it" Ooh, and whisper it quietly, it only costs $2K, so you can have the real deal rather than have to look like a pauper and buy a 5D because you can't afford a IDS11.
What has really changed is that in those days 35mm was 35mm - if you wanted bigger you really DID need a truck (I do landscapes, so I moved to bronica eventually), and if you wanted smaller you were down to joke Instamatics (remember the 110 SLR?).
Now there are three viable sizes, quite close, each increment costing more and being more of a backbreaker.
A smaller, ligher, high quality camera could do well. But not if it is pitched at unattainable quality levels with a ludicrous price tag, because it won't cut it.
I'll settle for 10-12MP, in a splashproof body with fast burst mode and quick AF, pitched at 5D prices, sold as a "smarter" pro camera for pros who don't want herniers, but actually also selling to keen amateurs who fancy a "pro" camera but not a $4K bill.
A 16MP 4/3rds camera would cost an arm and a leg, be as noisy as heck, and would be creamed by the opposition. The pros wouldn't buy it because the C&Ns would have less noise, and the keen amateurs would run a mile from the price tag.
Let's not forget, there is a wide open market at that price point, because C&N have each crippled their $2,000 cameras to force pros up the range. The 5d doesn't even have environmental seals, which, at the price point, is criminal.
Since Oly don't have a more expensive camera to bully pros into buying, they can make the best they can, sell it for $2K and still make a handsome profit (how much do a few seals cost?).
Pentax and KM don't really have the system credibility, but Oly do (just) and if they can make a plausible pro camera (even if it isn't quite a 1DS11 or D2) at 2K they'll eat hard into C&N's sales. And C&N won't be able to come back at them, because they still have $4K cameras to sell.
Seems obvious to me, let's hope a) that I'm right and b) that it is obvious to Oly.
All in my humble opinion.
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