One of the hottest news in mirrorless (besides the imminent announcement for the Fuji X-T1) is the Olympus E-M10 with its 14-42 pancake lens. But you can actually get the benefits of that 14-42 lens now, sort of -- in the form of the Olympus XZ-2.
The ratio of the E-M10's sensor vs. that of the XZ-2 is 2.33x (both are 28mm equivalent at the wide end, therefore just divide the 14mm actual focal length of the pancake with the 6mm actual focal length of the XZ-2). Although the E-M10 has a larger sensor, the XZ-2 has a wider aperture, with 2-stop advantage, increasing to 2.3 stops at the telephoto end, so it's almost a wash:
Olympus 14-42 pancake lens (28-84 equivalent): f/3.5 - 5.6
Olympus XZ-2 (28-112 equivalent): f/1.8 - 2.5
Therefore their full frame equivalent apertures are not that different:
28-112 f/8.4 - 11.6
At the wide end, the pancake has a net 1/2 stop advantage at the wide end, and a negligible ~1/8th stop advantage at the telephoto end. These differences won't matter much for depth of field. They are about the same.
Even if they have about the same DOF, what about the high ISO performance?
The 16mp Olympus m43 sensor is rated at 826 ISO (based on the EM5). The XZ-2 has a DXO rating of a paltry 216 ISO. But again, recall that the XZ-2 has a 2-stop aperture advantage. At moderate to lower light levels, you can take the same exposure on the XZ-2 at 2 stops lower ISO than on the EM10 (or any other 16mp m43 sensor). To compare the high ISO performance, I used the data from DXO's measurements of signal-to-noise ratio at measured ISOs. I emphasize measured ISO because the EM5 indicated ISO is way off the actual ISO -- by approximately 1 stop. I also created a separate data series based on the XZ-2's 2-stop aperture advantage. Here is the result:
From this graph, we see that at an actual ISO 400, the Olympus 16mp sensor has a signal-to-noise ratio of about 30.2 db. In the case of the XZ-2, at around ISO 400, the SNR is slightly less than 26.2 dB. However, because the XZ-2 is 2 stops brighter across the zoom range compared to the 14-42 pancake (or other M43 kit lens), you could take that same exposure at 100 ISO. At that ISO, the XZ-2 has a SNR of around 31.8 dB - better than the Olympus 16mp at a real ISO 400 (ISO 800 indicated on the EM5). This means that if you're using the 14-42 kit lens, the Olympus 16mp sensor only has an SNR advantage in conditions when you can use lower ISOs ("200" and "400" ISOs).
DYNAMIC RANGE, COLOR DEPTH
The story is the same with dynamic range and color depth: the XZ-2's bright lens overcomes the M43 sensor size advantage when used with the kit lens.
So if you're salivating over the Olympus 14-42 pancake lens (or if you're planning to use any M43 kit lens), you may want to consider a second look at the Olympus XZ-2, which has recently dropped in price. It's smaller and more compact, plus you'll get unlimited sync speed. And if you don't need flash and the tilting touch screen, you could even get a Pentax MX-1 which is even less expensive.