What is the Four Thirds standard?
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Below is quite a detailed description of the Four Thirds standard. Where necessary, I have tried to relate this new standard to existing standards in order to illustrate the logic behind certain aspects of the standard, but I don't offer any personal opinions or judgments on the standard on this page. My own views on the advantages and disadvantages of the Four Thirds standard can be found on a other pages in this feature.
If you are particularly interested in the Olympus E-1 and the E-System, it's well worth reading the following to fully comprehend what Olympus is trying to achieve.
The Olympus E-1 is the first camera to be developed to the Four Thirds standard. This standard is owned and was developed by Olympus but it is an open standard. The whole point of the standard is to promote a comprehensive camera system featuring cameras, lenses and accessories designed and manufactured by a number of different, competing, companies.

To date, the only two names that have been publicly associated with the Four Thirds standard, apart from Olympus themselves, are Kodak and Fujifilm. Kodak's semiconductor division developed and manufactured the 5 megapixel CCD sensor chip that the E-1 exclusively uses. Fujifilm has acknowledged its interest in the Four Thirds standard but has remained silent regarding any plans, or otherwise, to turn that interest into commercial reality.
Why the Four Thirds standard is significant
Since before World War II, 35mm film cameras have been the mainstay of the mid-high end consumer and professional photographer requiring easily portable equipment. The vast majority of 35mm film cameras shoot pictures in the 3:2 aspect ratio, 24x36mm, full frame format.
The problem of the 35mm legacy
With 35mm film SLR cameras firmly established, it's only natural to want and expect to be able to use lenses developed for these cameras. But when Olympus formulated the new standard, they identified fundamental problems with the 35mm legacy:
Sensor size and cost: Although imagers of the same size as a 35mm film frame exist, they are extremely expensive. This is because semiconductor manufacturing is much more cost-effective at producing tiny chips than large ones and a chip the size of a 35mm full frame is elephantine in the chip world. The cost of chips rises exponentially as the chip size increases.
Sensor size and lens compromise: Although some digital SLRs based on 35mm systems are available with full-frame imagers, to make digital SLRs more affordable, all current manufacturers have produced cameras fitted with image sensors that are smaller than a 35mm full frame. This lets you retain the use of existing 35mm system lenses but as only the central portion of the lens view is captured, the angle of view is significantly reduced.
At the cheaper end of the DSLR market the cropping factor can mean the useable angle of view is equivalent to that of a full frame camera fitted with a lens of 50% or even 60% greater focal length. This isn't too bad if you want to extend the effective reach of a telephoto lens; a 200mm lens would become equivalent to a 300 or 320mm lens, but at the wide angle end, a seriously useful lens like a 24mm wide angle lens becomes a very ordinary 36-38mm equivalent.
The solution to these problems was to create a new family of lenses specifically for a smaller imager size. This keeps the imager chip cost relatively low and avoids the issue of cropped wide angle view. A bonus is that lenses designed specifically for a smaller imager are more compact than their 35mm system equivalents. Both Nikon and Pentax have decided to produce lenses to match smaller imagers.
Sensor characteristics compared to film
Film has a relatively smooth surface and is able to receive light at a relatively acute angle without negative, pardon the pun, consequences. However, there is a school of thought that says the angle at which image-forming light rays fall onto the surface of an imager chip is critical and needs to be as close to 90 degrees to the focal plane as possible. This is because the light sensitive photodiodes live at the bottom of pits in the surface of the chip. As the angle of incidence of a light ray increases, less of the light is captured by the photodiode. Lenses designed for film cameras are allowed the luxury of acute angles.

Olympus says research by optical expert Professor Anders Uschold confirms that the use of typical lenses designed for 35mm film SLRs in digital SLR bodies demonstrates measurable loss of brightness and detail capture into the corners of the frame, also called corner shading, just as the angle of incidence theory predicts. He also demonstrates through his research that lenses designed specifically for electronic imagers in digital SLRS, using near parallel ray projection onto the focal plane by using near-telecentric lens design, are less prone to corner shading.
Defining the Four Thirds standard
The Four Thirds standard is founded on fundamental optical, mechanical and digital communication specifications.
Optical
Optically, the Four Thirds standard is based on the Vidicon picture tube size standard for a 4/3rd inch imaging device, hence the name. In the E-1's case the image sensor is a Kodak CCD. Roughly speaking, the imager frame diagonal is two thirds the diagonal of the mount it sits on. Using the Vidicon convention, the mount is 4/3rd inches or 1 1/3rd inches, or 33.8mm in diameter and this makes the diagonal of the imager itself 22.3 mm. This means the diagonal, corner to corner, distance of the imager in a Four Thirds system camera is fixed precisely at 22.3mm.
Myth number one exploded:
The name Four Thirds has nothing to do with the aspect ratio of the image frame, which just happens to be 4:3 with the E-1 and a lot of other digital cameras. Four Thirds system cameras are permitted to have any aspect ratio as long as the diagonal measurement of the frame is 22.3mm. The useable image circle projected from the rear of a Four Thirds system lens will cover any imager as long as its diagonal is 22.3mm. Future Four Thirds cameras could have square imagers or low and wide imagers, including the same aspect ratio as 35mm full frame cameras at 3:2. The imager type, CCD, CMOS, Bayer filtered or Foveon X3 type, is immaterial. That choice is down to the camera manufacturer.
The 22.3mm diagonal of a Four Thirds standard image is approximately half that of a full frame 35mm diagonal (43.27mm). This means a Four Thirds system lens of focal length, say, 14mm, will have approximately the same angle of view as a 28mm lens on a 35mm camera.
It ought to be noted that as the aspect ratio of a 3:2 frame on a 35mm camera (and most other digital SLRs) is lower and wider than a 4:3 frame on the E-1 (and many other digital cameras), while the diagonal angle of view is comparable, the lateral and vertical coverage will be different, with lateral coverage slightly greater for the same angle of view with a 3:2 aspect ratio camera and slightly higher vertical coverage for a 4:3 aspect ratio camera.
Mechanical
The Four thirds standard defines the lens mount size, three claw bayonet design, fit and distance from the focal plane. Nine electrical contacts lie inside the bayonet perimeter. The diameter of the lens mount aperture is roughly double the diagonal of the imager, or 50mm. This provides adequate room for large rear elements that are often required in the design of near-telecentric lenses. The distance from the mount to the focal plane is also relatively large, making more space for components like the reflex mirror, filters and the focal plane shutter in front of the imager at the focal plane.
Digital communication
A communications protocol is defined by the Four Thirds standard to enable information to be exchanged between the camera body, lenses and flash units. Each of these system components has its own user-upgradeable firmware and a microprocessor. Besides aperture and focus settings in use, lenses present a predetermined profile of optical characteristics specifc to that lens to the camera. The camera can use this information to compensate for these characteristics, like corner shading or optical distortions. The same lens profile information can also be saved with image files for optimal off-camera post processing on a PC.
An open standard
The Four Thirds standard is available to any company that wishes to produce lenses, camera bodies or flash units compatible with the standard.
Check the dedicated Olympus E-1 interactive forum