The Lumix DMC-FZ38 is an incremental update to Panasonic’s line of compact super-zoom cameras. Based on the FZ28, the new FZ38 boasts 12.1 megapixels, an 18x wide zoom, and 720p HD video with stereo audio and an AVCHD Lite recording format. And, remarkably, it can also recognize your family and friends.

The Lumix DMC-FZ38 (known as the FZ35 in North America) is the latest generation on the Panasonic FZ8 family tree. Building on the successful FZ28 (which itself descended from the FZ18), the FZ38 adds a few new features to stay competitive with other digital cameras in the super-zoom, or premium compact, market such as the Nikon P90 and the Casio EX-FH20.

The DMC-FZ38 features the same camera body as its predecessors. Inside, the FZ38 retains a 1/2.3in size CCD sensor, but packs 12.1 megapixels compared to the FZ28’s 10.1MP. The FZ38 also keeps the fixed Leica lens, an 18x (27 to 486mm equivalent) with f2.8/4.4 aperture.

Panasonic has beefed up the FZ38’s video capabilities as well. Although the FZ28 also has 1280 x 720 30fps HD video recording, the FZ38 adds stereo audio and the ability to record in the AVCHD Lite format. Panasonic claims that AVCHD Lite provides almost double the recording time in HD quality, compared to the conventional Motion JPEG format. The camera also features a creative movie mode which provides for manual shutter speed and aperture control. The zoom lens can be operated during video recording, and features a dual-speed control for smoother zooming.

Now here’s where the features start to get a little creepy: many digital cameras offer face detection capability, which automatically spots the human faces in your picture and adjusts the focus and exposure accordingly. Panasonic takes this concept a step further - possibly crossing into Big Brother territory - with its face recognition feature. When a familiar face, such as your spouse or your Uncle Larry, has been recorded several times, the FZ38 will prompt you to register this face. The next time Uncle Larry then appears in the frame, the camera displays his name and prioritizes focus and exposure so his face is bright and sharp. Up to six faces can be registered, and as many as three can be simultaneously recognized in one image.

Another improvement found in the FZ38 is the new Power OIS image stabilization. Power OIS is optical image stabilization that compensates for camera shake, even the low-frequency vibrations caused when you press the shutter button, according to Panasonic.

The Panasonic DMC-FZ38 will be available in September with a price under USD$400.

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