The Leica X Vario (Typ 107) ($2,850 list)($2,950.00 at Amazon) is a camera that, when it was announced, had a lot of folks asking, "why?" Compact cameras with D-SLR-sized APS-C image sensors are a growing market, but the recent generation has had a couple things in common—fixed-focal length lenses and an emphasis on compactness. This has led to some impressive designs, like the extremely pocketable Editors' Choice Ricoh GR($628.00 at Amazon) with its fixed wide-angle lens. But the X Vario's big lens puts it in the same size class as an interchangeable lens camera like the Fujifilm X-E1($699.00 at Amazon), and its asking price is sky-high. We were impressed by the X Vario's stellar build quality and impressive image quality, but felt a bit limited by the narrow aperture of its lens and lack of optical image stabilization. If you're in love with the idea of this camera, and have the money to spend, it's worth consideration. But the Fujifilm X-E1 is so similar in size, is more versatile, and costs so much less that the 16-megapixel X Vario is a tough sell—even more so than other high-dollar Leica cameras.

Design and Features Eight years ago Sony wowed shooters with a zooming fixed-lens APS-C camera, the R1, but that was before mirrorless cameras were a reality. Canon tried to crack the same nut in early 2012 with the PowerShot G1 X, a zooming compact with an image sensor that slotted between Micro Four Thirds and APS-C in size. The G1 X was plagued by doggish performance, but its image quality was impressive. The X Vario is the first fixed-lens camera with a zooming design and comparably-sized image sensor to hit the market since.

Its body takes its design cues from the prime-lens Leica X2($1,738.50 at Amazon), with a few refinements from the full-frame M thrown in. It measures 2.9 by 5.2 by 3.7 inches (HWD) and weighs 1.5 pounds. It's a bit on the heavy side, but the build quality is impeccable. The aluminum top plate is cool to the touch, and the magnesium chassis is sturdy. The body is covered by a black leatherette that is textured to give you a better grip, and a black leather strap is included. An optional add-on handgrip ($129) is available for purchase for shooters who prefer one.

The X2 is a bit smaller all around at 2.7 by 4.9 by 2 inches (HWD); it manages a slimmer profile thanks to a fixed 35mm f/2.8 (35mm equivalent) lens. The X Vario features the same style pop-up flash and top-mounted shutter speed and aperture controls. Its 28-70mm f/3.5-6.4 lens adds a dedicated manual focus ring, which is the best we've seen in a camera of this type—most require you to fiddle with buttons or dials in order to adjust focus manually. The zoom is also manual, a welcome departure from the power zoom lenses that are common in cameras that lack interchangeable lenses.

In addition to the shutter and aperture control dials, top controls include a power switch with three settings—off, single shot mode, and continuous drive mode, just as on the X2. There's also a dedicated movie record button, which is a carryover from the design of the M rangefinder. On the rear you'll find a control layout that comes straight from the M—there's a single control dial, with an integrated thumb rest, and a silver directional pad with a center button. To the left of the LCD there are rectangular buttons that control image playback and deletion, the focus mode, white balance, and let you dive into the menu. The four-way directional pad allows you to navigate through menus, with integrated controls to adjust the self-timer, exposure compensation, and flash output.

The Delete/Focus button serves a dual purpose depending on whether you're shooting or reviewing images. When shooting, a single press brings up a menu that lets you select the autofocus mode; your options are 1-point, 11-point, spot, or face detection modes. If you're in a mode other than face detection, holding the button down for a second allows you to move the focus point around the frame. If you're in 1-point mode there's a small rectangle that moves, and spot gives you a finder cross-hair spot to move across the frame. You get a little less flexibility in moving the 11-point system around; you can select the left side, center, or right side of the autofocus points. I would have preferred not to have to hold the button down and simply made the points actively mobile at all times, but all things considered it's an easy way to select the point of focus for a scene.

The menus are text based and utterly straightforward. Navigation is responsive; there's no delay between tapping buttons and seeing the results on the 3-inch rear display. That LCD is excellent; I had no problems seeing the live view feed when shooting under the bright sun. It has a 920k-dot resolution, and images look bright and crisp when you are reviewing them. You can zoom in on photos to confirm focus, and if you prefer to manually focus the camera a magnified picture-in-picture type window will appear to aid you in your efforts. There is an EVF available; it slides into the hot shoe. The Leica EVF2 ($499) features a 1.4-megpaixel resolution and a tilting design. Aside from the logo it's the exact same EVF that Olympus markets as the VF-2 ($249.99), so save yourself a few bucks and buy the Olympus model.

I used Imatest to check the sharpness of the X Vario's zoom lens. It's a 28-70mm (35mm equivalent) design, with an aperture that starts at f/3.5 and dwindles to f/6.4 when zoomed in. The modest aperture means that you won't be able to create a shallow depth of field as you can with a faster lens, although it's still possible if you are working towards its minimum focus distance. That's 1.3 feet for all but the 70mm setting; when zoomed all the way in you can focus as close as 1 foot. This isn't a wide-aperture lens, so you have to work a bit in order to obtain subject isolation; it's not going to magically blur the background of almost any shot like a 50mm f/1.4 lens will do. There's no image stabilization built into the lens, but under certain conditions the camera will apply digital stabilization. When you're shooting at a shutter speed from 1/4-second to 1/30-second at an ISO setting of 1600 or lower the camera will capture two photos in quick succession, analyze them, and combine them into a single photo that minimizes blurriness from camera shake. If you're not a fan of this technique, it can be disabled via the menu.

The more you zoom in, the better the X Vario's lens is. At 18mm f/3.5 it is just a little bit below the 1,800 lines per picture height that we require of a lens to call it sharp. Using a center-weighted test, the X Vario scored 1,774 lines at 18mm f/3.5. Edge performance was weak, just 1,441 lines, which brings the score down a bit. Stopping the lens down to f/5.6 brought the score up to a more respectable 1,869 lines, but edges still hovered around 1,500 lines. In visual terms, the edges of the squares of our test chart appeared just a little bit fuzzy at 18mm; it's something that you're not going to notice when viewing images at screen resolution, but if you're making a large print it could detract from its impact. 

Things got much better around 32mm (the 50mm equivalent setting). Here the aperture narrows to f/5.1, but the average sharpness across the frame is 1,978 lines, with edges that just fall shy of 1,800 lines. Performance is about the same at f/8. When zoomed all the way to 46mm (70mm equivalent) the aperture narrows to f/6.4. The X Vario scores 2,043 lines here, with edges that approach 1,900 lines. Narrowing the aperture to f/8 delivers almost identical results. Distortion was modest, but present; at its best it's about 1.2 percent, and only 2 percent at its worst. You'll see some slight curving of straight lines, but it's easy enough to fix in Adobe Photoshop Lightroom, which is the included Raw converter.

There aren't any other APS-C compacts with zoom lenses on the market, so we chose to compare the results with the Fujinon XF 18-55mm F.28-4 R LM OIS($699.00 at Amazon) lens that Fuji bundles with its X-E1 mirrorless camera. It manages 2,252 lines at its widest, 2,329 lines at its midpoint, and 2,399 lines at the telephoto end of its range. Stopping the lens down doesn't affect performance; it's impressively sharp from edge to edge, and distortion is minimal. It also benefits from a wider aperture at every focal length and optical stabilization. It can focus closer than the X Vario at its widest angle (11.8 inches), but it is limited to 15.7 inches at its 55mm (83mm equivalent) extreme—that 2.7 inches is partially offset by its longer focal length.

Imatest also checks photos for noise, which can make them appear grainy and rob photos of detail at higher ISO settings. The X Vario doesn't deliver the best score in the world; it only keeps noise below 1.5 percent through ISO 800 when shooting in JPG format. Close examination of our ISO test shots on a calibrated NEC MultiSync PA271W($999.00 at Amazon) display show that while high ISO shots are pretty grainy, JPG detailed is very impressive through ISO 6400. We've included a few sample crops in our slideshow to illustrate this.

When looking at Raw images side-by-side with the out-of-camera-JPGs, it's clear that X Vario's image processor is taking a very light-handed approach to noise reduction. A Raw DNG image shot at ISO 6400 looks almost identical to its unprocessed Raw counterpart; the JPG has a big more contrast at default picture output settings. Shooters who prefer that the camera take a hands-off approach to JPG processing are sure to be appreciative. The only knock against this is that other cameras can be configured to apply more or less noise reduction to JPGs, allowing photographers who don't want to fiddle around with photos the ability to tune the JPG output to their liking. The Ricoh GR is the perfect example; its noise reduction customization is second to none.

There is one interesting quirk of note in regards to Raw capture: The X Vario doesn't have a Raw only mode. Your only options are JPG (in fine or super fine compression) and Raw+JPG. You can choose to save JPGs in either compression format alongside the Raw image, and further minimize the space they take up on your memory card you can set JPG files to be written at resolutions as low as 1.8 megapixels, while still capturing full-resolution DNG Raw images.

The Vario X records 1080p or 720p video at 30fps in MP4 format. The camera refocuses smoothly during video recording, and the footage is sharp, but there was a hint of jelly-like motion when moving the camera, likely a result of a mild rolling shutter effect. Manually focusing the lens or adjusting its focal length adds some unwanted noise to the soundtrack, but otherwise the internal microphone does a good job at picking up voices. There's no external mic input, but for casual video recording the X Vario is perfectly fine. It's not the right form factor, nor does it have the right features, for pro video work; no camera in this class is. There is a mini HDMI port, as well as a standard mini USB port. SD, SDHC, and SDXC memory cards are supported, and X2 who are contemplating adding the X Vario to their kit will be happy to know that both use the same rechargeable battery.

There's no doubt that the X Vario is an extremely well-built camera that's capable of capturing some impressive images, and the hands-off approach to in-camera noise reduction is a welcome one. But its limitations, including a rather modest aperture with no optical image stabilization, high sticker price, and bulky fixed zoom lens make it a tough sell. It's the only fixed-lens APS-C camera with a zooming design, but it doesn't benefit from the size advantage that a fixed-lens compact generally delivers. The Fujifilm X-E1, which manages to squeeze in an in-body EVF and ships with a zoom lens with a longer zoom range and more ambitious aperture is about the same size as the X Vario; even with the lens attached it's only about a half-inch deeper.

It's not fair to compare the camera with fixed-lens compacts like the Ricoh GR and Fujifilm X100S, both of which received Editors' Choice awards in the large-sensor compact category, which is why the X-E1 keeps coming up as an alternative—its form and function are so close to the X Vario that it's a logical option. When compared with the only other big-sensor zooming compact that's currently on the market, we end up giving the same star-rating to both the X Vario and the Canon G1 X. The Vario is a better camera, but its retail price is more than three times that of the G1 X, and the G1 X has been on the market long enough that it is readily available for far less than its original sticker price.

If you're in the market for a camera with the form and functionality of the X Vario and are set on one with a fixed lens, you can save some money and buy an X-E1; just don't take the lens off. Even though I really enjoyed shooting with the X Vario, I did yearn for the ability to capture images with a shallower depth of field at times. While you can do so by working close to your subject at longer focal lengths, there are times when doing so just isn't possible and only a wider aperture will suffice to separate subject from background. The lens design also limits your ability to take photos sans flash in dimmer light, even at ISO 6400. If you can live with these limitations and really are in love with the X Vario, its image quality, handling, and performance won't disappoint you, but it doesn't change the fact that you can get a more versatile camera of similar size for a lot less money.

The Leica X Vario (Typ 107) camera marries a zoom lens to a big APS-C image sensor, but its slow lens and high price make it a tough sell.