Sony’s made huge inroads with its Cyber-shot point-and-shoot digital cameras and its Alpha DSLRs—now it’s going after the market directly between them. The just-announced Cyber-shot DSC-RX100 ($650) packs a monster-sized 1” EXMOR sensor and faster f/1.8 lens into a body that’s only modestly larger than Canon’s widely-respected PowerShot S100—in fact, virtually every feature of the RX100 improves on that inspirational model. If you’re looking for a pocket-sized camera with outstanding low-light performance, and willing to pay a premium price to get it, this looks to be the best near-term option.

DSC-RX100’s single biggest feature is the Sony-designed, 20.2-Megapixel sensor, which is three to four times the physical size of the sensors in most pocket cameras—a major difference that allows this camera to deliver cleaner, more natural-looking images even in dim indoor lighting. A fast processor enables the RX100 to shoot at up to 10 frames per second, simultaneously record 1080p videos alongside 17-Megapixel still images, and offer creative shooting modes. Then there’s the big Carl Zeiss lens, which emphasizes speed and quality over zoom range, opting for an f/1.8 to f/4.9 3.6X zoom rather than the slower f/2 to f/5.9 5X zoom found in Canon’s S100. Even the 3” rear screen is superior, packing over 1.2 million pixels into the same space as the S100’s 461,000. There’s only one issue, and that’s the more than $200 price difference between these models, a fact that will guarantee the S100 a place in more pockets, while the DSC-RX100 earns a “king of the hill” designation. It will be available starting this July.