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I'm thinking of my wife, a compact user that does want better quality etc but its not that compact in reality. its still going to have to have huge lenses
But it's not aimed at you or me is it.
It's new, it's different, it's got Canon written on it and they will market the legs off it pre-Xmas.
It's also much smaller and lighter than a comparable DSLR (and the target users don't use eye-level viewfinders even when they've got one) it's got great video features and (hopefully) an AF system that works better than the competition with moving subjects. I think they've gone for a larger sensor than 4/3rds because buyers want 'those blurry backgrounds' which you'll get more of, especially with the f/2 lens. The EF adapter mostly an irrelevance I think - a 'marketing' feature, and a sop to us lot.
EOS-M doesn't seem very revolutionary but I guess this is the best Canon can do with the technology right now, and they can't afford to let another Xmas go by. It'll sell loads, the street price will drop to whatever it needs to be, and the tech will surely get better. Nikon looks like they've pulled a bit of a neat flanker ATM, and they have phase-contrast detect AF on-sensor too. I expect Sony won't be far behind. The battle lines are drawn