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The Panasonic Lumix DMC-FP3 is a stylish ultra-compact digital camera with an effective resolution of 14.1 megapixels from a 1/2.33" RGB CCD image sensor, which Panasonic has coupled to a Lumix DC Vario branded 4x optical zoom lens with a rather tight 35mm-equivalent wide angle. Importantly, the Panasonic FP3's lens features a true optical image stabilization system with which to fight blur caused by camera shake. The Panasonic FP3's lens has a two-step aperture that offers F3.5 and F5.6 at wide angle, or F5.9 and F7.1 at telephoto. The minimum focusing distance for the Panasonic DMC-FP3 is ordinarily 30 centimeters, but drops to ten centimeters at wide angle when switched to Macro mode.

There's sadly no optical viewfinder, with the Panasonic FP3 instead opting solely for a 3.0" touchscreen LCD display with 230,000 dot resolution on which images and videos are both framed and reviewed. The Panasonic DMC-FP3 has a nine-point multi-area autofocus system which also includes a single-point "high speed" focusing mode, and also allows the photographer to touch the screen to indicate a point on which the camera should focus. As with many digital cameras these days, there's also a face detection function, with Panasonic's implementation using the information to adjust both focus and exposure to properly capture your subjects' faces.

ISO sensitivity ordinarily ranges from 80 to 1600, with the ability to extend this as far as ISO 6400 equivalent in High Sensitivity mode. Shutter speeds from 1/1,600 to 60 seconds are possible. The Panasonic DMC-FP3 uses Intelligent Multiple metering, and offers six white balance settings including Auto, Manual, and four fixed presets. A whopping selection of twenty five scene modes let users tailor the look of their images, useful given that the Panasonic FP3 doesn't offer aperture-, shutter-priority, or fully manual modes. There's also an Intelligent Scene Selection function, which can automatically select from a subset of six commonly used scene modes. A four mode flash strobe includes red-eye reduction capability, and has a rated range of up to 4.9 meters at wide angle, or 2.9 meters at telephoto. The Panasonic DMC-FP3 also includes the company's Intelligent ISO and Intelligent Auto modes as seen on past models.

As well as JPEG still images, the Panasonic FP3 can capture 30 frames-per-second movies with monaural sound at resolutions of 1280 x 720 pixels or below, although the compression used is the older QuickTime Motion JPEG type so file sizes are likely to be hefty. The Panasonic Lumix DMC-FP3 stores its images and movies on either SD or SDHC cards, as well as the latest SDXC types. There's also a generous 40MB of built-in memory. Connectivity options include a USB 2.0 Full-Speed connection (rather than the much faster USB 2.0 High-Speed connections found on most current cameras), plus standard definition NTSC / PAL video output (or NTSC only for North America). Power comes from a proprietary Lithium Ion rechargeable with ID-Security feature that prevents use of counterfeit or third-party batteries, and is rated as good for 300 shots on a charge to CIPA testing standards. The software bundle includes PHOTOfunSTUDIO v5.0, Quicktime, and Adobe Reader.

The Panasonic Lumix DMC-FP3 ships from mid-February 2010, priced at about $230.