This site originally panned the Olympus E-PL, concluding that it seemed (right off the bat) like a first effort that could have been improved.  My complaints about the E-P1 were that for all of the claims that Micro Four-Thirds (µ43) would allow tiny cameras, the E-P1 was large, heavy, slow and somewhat unwieldy to use - all to an extent that was difficult to justify in light of the sensor it was carrying.  Maybe my reaction was over the top - and it certainly set off the E-P1 fans on dpreview.com – but history does demonstrate that the E-P1 went down in flames within five months of its release.

One striking thing about product offerings in Four-Thirds and µ43 is the  proliferation of camera models with almost no low-level specification upgrades.  This has been true across manufacturers - and even within some.  For example, the Olympus E-P series (µ43) has included four models in two years with very little differentiation in capabilities:

This short attention span in µ43 is much more reminiscent of old Sony (i.e., pre-Konica-Minolta) than Olympus at any time in the past.  For the digital Pen line, for all of the model variation, there has not been any significant upgrade of the µ43 sensor - the most fundamental determinant of image quality. Panasonic, for its part, has also been proliferating models at a fairly rapid pace, running through the G1 (9/2008), G2 (3/2010), GF1 (9/2009), GF2 (11/2010), GH1  (3/2009) and GH2 (9/2010). At least with the GH2 (the sixth of six models), Panasonic increased the pixel count to 16 million from 12.1.  Olympus seemingly has been stuck at 12.3.

For comparison of Olympus product cycles, the Pen F from which the E-P1 takes its design cues (and its marketing) was produced from 1963-1966, and the metered Pen FT was produced from 1966-1970.  Even the original OM-1 was produced for six years -  1973 to 1979.

All of this running in place is beginning to beg the question of whether (1) these two remaining µ43 manufacturers are stuck in a cycle of churning product (with continual and minor improvements) to maintain their own relevance or (2) whether desperation is setting in for the µ43 (if not also the greater Four-Thirds market).

Even before µ43 hit the market, there was a huge number of Four-Thirds products from Leica, Panasonic, and Olympus that all revolved around (1) a common, "open" standard* and lens protocol; (2) relatively undifferentiated sensors (Kodak and Panasonic); and (3) relatively undifferentiated camera body specifications.  If you're a student of economics, you see where this is going: an open standard coupled with undifferentiated products makes you a price-taker in a perfectly competitive market.  That is seldom a recipe for massive profitability.

*Per the Four-Thirds consortium ("Consortium") web site, the basic standard (whether Four-Thirds or µ43) is available to camera manufacturers on a nondisclosure-agreement basis and cannot be provided to individuals or researchers.  That sounds like an amazing (if not intentional) barrier to entry. It is also a little bit strange to advertise a standard as open, yet patent it.

Although there was much ballyhoo about Four-Thirds (and µ43) being "open standards," the reality is that only two companies actually manufactured cameras (Leicas were reworked Panasonics), and Olympus made and sold 14 out of 17 Four-Thirds bodies (by model count).  Four-Thirds is now identifiable as an Olympus drum solo, and µ43 is an Olympus/Panasonic buddy picture.  Sigma is a fair-weather friend, mostly adapting APS-C lenses but making a couple special Four-Thirds models.

It is this writer's perception that Four-Thirds failed to set the world on fire, and µ43 has managed to prolong the agony.  The original Four-Thirds format had its challenges: a 4:3 aspect ratio that (1) didn't really conform to the norms of 3:2 for professional SLR systems (be they APS-C or 36x24mm), (2) was designed to match TV screens that were being phased out in favor of 16:9, and (3) required (and requires) the sacrifice of megapixel real estate to get to a conventional aspect ratio (for stills or for film). 

The one thing Four-Thirds did have at the beginning was a range of relatively compact bodies (like the E-Volts with their porroprisms) and lenses that were scaled appropriately to a sub-35mm sensor.  This was better than what initially happened with Nikon and Canon: huge lenses throwing excessive image circles for APS-C sensors housed in huge bodies (for example, the Nikon D1).  But today, Four-thirds seems to be stagnating (you know it's bad when the gladhanding dpreview.com calls the E-5 a "warmed over" E-3).  And even for µ43,  where there is arguably more action, only niche players are involved.  Olympus is the clever but marginally important manufacturer that tried this before with the half-frame Pen, and Panasonic has no history in system digital cameras outside Four-Thirds. If Panasonic is making the sensors, every system will be limited to what Panasonic wants to make or what Olympus will pay to develop.  Beyond that, there is only so much you can do with processing, AA filters, and tweaking the way contrast detection autofocus works.  Look at the Nikon D3x and the Sony A850, which share common sensors - and there is not as much a difference in image quality as the $6,000 price difference might suggest. 

But product offerings might be a completely superficial way to tell where the format is headed. Perhaps the promises and delivery are a better measure of whether the format has any staying power?

There is nothing blatantly untrue about the claims of the Consortium, but nothing inherent to the Four-Thirds or µ43 systems would cause someone to choose one of these formats over APS-C or FX. And the deployment of faster and smaller zoom lenses, the really interesting thing at the beginning of Four-Thirds, is far less compelling now given their cost and the massive progress in everyone else's sensors. Canon, Sony and Nikon have sunk gigantic amounts of money into improved high-ISO performance - and it shows.

At the end of the day, we have a number of reasonably capable Four-Thirds and µ43 cameras.  We have all seen some fantastic work done with them.  But query whether any variant of the Four-Thirds system (regular or micro) has the qualities that will make it a long-term contender in the marketplace. Several things agitate against it:

It may not be time for a high-low on the survival of Four-Thirds and µ43, but things are not looking too good right now. It is possible, however, that 2011 will bring some quantum leap that will make µ43 an attractive and viable format.