You can get up to a 2x optical zoom, which may not seem like much, but is a lot better than the "nothing" that most smartphones have. The digital zoom goes up to 10x, but your images will be more pixelated with higher zoom settings.
How can the iPhone 7 Plus do this without a bulky zoom lens? It uses two cameras, one with a regular lens (28mm like on the iPhone 6s) and one with a 2x telephoto lens. That allows you to switch between a regular view and approximately double telephoto view. Apple's calling the feature "optical zoom at 2x," but it's not clear if you can actually "zoom" between the regular (1x) and 2x views.
Each can also focus on a different part of the scene, allowing the user to change focus after the fact. This feature, which Apple calls "Depth," gives a much shallower focal range than a regular smartphone, letting you create blurred "bokeh" effects. With a machine learning system, it can also separate a subject from its background for more DSLR-like images (below).
The concept of using dual cameras in this way, pioneered by Corephotonics and, to a lesser extent, Google and Movidius with Project Tango, has been used already by Huawei and LG. Unlike Apple, however, Huawei didn't fully exploit it, with its monochrome and color sensor combo allowing for selective focus and shallow depth of field, but not zooming.
The iPhone 7 Plus cameras also get the new tweaks added to the smaller iPhone 7, too. That includes an optical stabilizer, faster f/1.8 lens on the wide camera (the telephoto has an f/2.8 lens), "Quad-LEDs" that throw 50 percent more light, a sensor to reduce flicker with artificial lights and so-called wide color, with more hues than before. Oh, and it now supports RAW DNG photos via a new API.
Both smartphones have a brand new image processor that can do 100 billion operations on a photo in just 25 milliseconds. The sensor is 30 percent more efficient and 60 percent faster, giving it better light sensitivity.
The images from the iPhone 7 Plus that Apple showed off at its event (taken by a professional photographer), had very good shadow and highlight details, and less noise in low light. The company implied that the new camera could even replace a DSLR or mirrorless camera in a pinch, though it downplayed the comparison afterwards. We'll figure out whether that's accurate or not when we do a full review.
Update: The article originally said that "An image processor averages both cameras to create a new, intermediate zoom photo with no loss of resolution." It appears, however, that you can only select a regular view or a 2x telephoto shot, and can't actually "zoom." We've updated the post and reached out to Apple for more details.
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