The DMC-SZ1 features powerful 10x optical zoom LEICA DC lens from 25mm ultra wide-angle that fits in the slim, compact body (35mm camera equivalent: 25-250mm). The new lens system makes the unit’s overall length short to fit in the slim body despite its versatile zoom range from ultra wide to telephoto. The 10x optical zoom increases its power to 20x equivalent with the Intelligent Zoom function. This is an extensive zoom function using digital zoom with minimum deterioration of image quality thanks to the Intelligent Resolution technology.

With DMC-SZ1, there are two options to record spur-of-the-moment scenes – 16.1-megapixel high-resolution photos and HD videos. In still image recording, the Sonic Speed AF helps to catch even the most fleeting photo opportunities. In video recording, the DMC-SZ1 can record HD (1280 x 720) videos in MP4 format. This format has high compatibility with computers. A separate button lets you instantly start recording video without the need of extra settings. The 10x optical zoom is available in video recording.

The MEGA O.I.S. compensates for blurring caused by hand-shake. Even slight hand-shake movement is accurately detected by a sampling frequency of 4,000 times per second, and compensated to produce sharp, clear images. The Venus Engine controls the shifting of the blur-stopping lens to further increase the detection accuracy and correction effect of MEGA O.I.S.. It works for zoom shots and macro shots, which are especially susceptible to hand-shake, and lets you shoot in dimly lit rooms or evening illumination without losing the mood.

The DMC-SZ1 features a 16.1-megapixel high-resolution CCD. Combined with the Venus Engine, 16.1-megapixel CCD sensor enables the recording of beautiful photos and high-definition videos with higher quality signal processing.

The Miniature Effect Mode in which the peripherals are defocused while saturation and contrast is emphasized to make the picture looks like a diorama. The video recorded in this mode is played back in 10x fast-forwarding making it more comical to watch. The Panorama Shot in the Scene Mode makes it possible to shoot horizontal / vertical panoramic images by overlaying consequently shot images. The Auto Retouch function adjusts contrast and brightness to give different impression to the photo with just a press of a button.