From its physical appearance and published specifications it appears that the Panasonic Lumix DMC-LX2 is very similar to the Leica D-LUX 3 and the Lumix DMC-FZ50 is similar to the V-LUX 1. The cosmetics are slightly different. The Leica versions have hard edges on the sides of the camera body. In the case of the D-LUX 3 this actually gives a firmer grip on the small body.

It is claimed on the Internet that JPG processing in the Leica model is less aggressive, but presumably there is no difference in the RAW output compared to the Panasonic version. Some of my tests showed a difference in the RAW output appearance between the FZ50 and LX2. Thus I wrote an email to Leica USA with the question:

Before purchasing the Leica D-LUX 3 camera I need to know if the RAW files are truly raw data or if some processing has already been applied that smoothes the output from adjacent pixel locations. This apparently has been done in the related Panasonic DMC-LX2 as I noticed from analyzing its raw output in Lightroom and comparing it to the Leica V-LUX 1 output.

I received the following response:

The proprietary firmware in the Leica D-Lux 3 is designed around our preferences and is therefore different than that in the Panasonic Lumix model. However we do not have any specific details available regarding how the Raw captures are handled in any of the cameras.

There is a considerable price difference between the D-LUX 3 ($600) and the LX2 ($377) and even more so between the V-LUX 1 ($849) and the FZ50 ($466). So what am I missing besides Leica's red dot and a one year longer warranty when I buy the Panasonic model?

In October of 2007 I had a private tour of the Leica M8 manufacturing facility in Solms, Germany. It had been arranged by a relative who used to work in the Leitz Wetzlar microscope development group. It was a most impressive introduction into Leica's dedication to product quality, to the tooling, testing and calibration which are necessary to guarantee the consistency of a superb design in production quantities.
I also gathered some hints about the differences between Leica and Panasonic products. The lenses were designed and specified by Leica but are being manufactured in Japan. I saw in Solms how lens elements for the M8 were individually ground, polished and tested. This is a slow process even when rows of robots are used and it may take up to 40 minutes for a single, critical element. In contrast Panasonic uses mass production techniques where multiple lens elements are mounted to the same grinding and polishing head and they are all worked on simultaneously. This leads to some variability between element finishes. Furthermore, not every lens element is tested. Instead samples are taken and measured to keep the manufacturing process under control and within specifications. Thus one can expect some variability in the lens performance. See the Sharpness page. I could not find out if the Panasonic built lenses, when used in a Leica product, would have to meet tighter specification than what is shipped in a Lumix. I only learned that if Panasonic would ship a Leica branded product that does not meet Leica's specifications, it would have expensive consequences for Panasonic. Thus I assume that Panasonic keeps tight control on their lens production and will not use a potentially costly process of selecting lenses for Leica. More likely they will assure that every lens meets Leica specifications and tolerances.

The data processing firmware is designed around Leica preferences. So there is a difference, but it only carries an initial development cost. It adds value though.

The remaining critical element for picture quality is the light sensor, the charge-coupled-device or CCD. There is usually some variability in CCD performance due to imperfections in the semi-conductor material and chip manufacturing process. It shows up also in its noise performance. Thus one can assume that each CCD has been tested for acceptability and that possibly they are sorted according to their application. I have found from testing the four cameras that the FZ50 and V-LUX 1 sensors show very similar noise behavior and for the FZ50 sensor actually somewhat lower noise than for the V-LUX 1. The LX2 is noticeably noisier than the D-LUX 3 but slightly less so than the FZ50. The D-LUX 3 exhibits the lowest noise of the four cameras. It leads me to assume that it uses a selected CCD to meet Leica specifications. My tests are on the CCD web pages.

So, if I am correct in my observations, what do you get when you buy the Leica V-LUX 1?
You get a camera that meets the Leica specifications and that is guaranteed not to exceed their tolerance limit. The FZ50 might have a higher tolerance limit on the CCD. If so, you might get one which is noisier than the V-LUX 1. In my case it appears that I tested a FZ50 which is noise-wise below the V-LUX 1 limit.

The D-LUX 3 appears to use a CCD with tighter specifications and if so will provide better image quality in low light portions of a photograph than the LX2. Both cameras use a CCD design that gives a different noise pattern than the CCD in the V-LUX 1 or the FZ50.

These are my conclusions about the camera differences. Since they are based on testing one sample from each model they are statistically speaking not solid. I just wished that Leica would be more forthcoming about what is really going on. Since the company is usually very committed to quality I will assume that this is also reflected in their compact digital cameras, and not just in the M-series. It would be valuable for a potential buyer to know what is special about a D-LUX 3 or a V-LUX 1 and other models that seem to have a lower cost "equivalent". Hopefully it is not only a Leica brand mystique.

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I have written to Leica in Solms about my comparison tests and that I would appreciate their comments and corrections, hoping to add those to my web pages. Meanwhile their CEO, Steven K. Lee, has been fired. Presumably the company is in some turmoil. Thus it might take a while.

-- Introduction -- Lens & image -- A/D conversion -- Lumix & Leica -- Sharpness -- CCD noise1 -- CCD noise2 --