It has produced a "collapsible" zoom lens that fits its cameras, as well as, those from Olympus. It works like the lens on a point-and-shoot camera. It collapses to a very small size to give the camera an equally small profile when not in use, or during wide angle use. But it can telescope to increase the focal range.
Unlike a point and shoot, the telescopic range is optically stabilized to give sharp images throughout the entire focal range. The stabilization allows for zooming-in while shooting video with the camera just like on a point-and-shoot. This makes shooting sharp video much easier than using a DLS that requires manual focus while zooming.
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Olympus has had a m4/3 14-42 "collapsible" zoom lens for almost two years now (an updated version II better optimized for video is now available).
However, the new Panasonic lens is apparently the first of a series of "pro" (X-series) lenses for M4/3 (expect $$$). This particular 14-42 zoom lens collapses even smaller than the Olympus one, about 1" in height instead of 2", and includes motorized zoom (like a compact camera) plus it includes optical stabilization.
What is more interesting is that Panasonic is betting that there is a market for very high end m4/3 lenses (they also will be selling a "pro" 45-175mm m4/3 lens).
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