Having first seen the new Olympus OM-D E-M5 Mark II a week ago - having aligned its products into their hierarchical roles, Olympus is now "doing a Canon" with its models, hence the "MkII" name - we've since explored the camera's capabilities at the Olympus Action Factory, testing many of the camera's core features to see how it handles in various conditions.

In its second-generation format, the OM-D E-M5 II positions itself one rung down from the top-spec OM-D E-M1 compact system camera. Although, arguably, with its raft of feature updates, it's the best camera in the OM-D range. And potentially one of the best compact system cameras on the market.

There are obvious improvements on board, led by the new and improved 5-axis image stabilisation, which offers a purported 5-stop advantage for handheld shooting, alongside a new vari-angle LCD screen. The same top-of-the-line electronic viewfinder as found in the E-M1 also features, squeezing in more resolution and magnification than the first generation model.

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But perhaps most striking about the E-M5 Mark II is its new design. Although it's not drastically different to the first-generation model in terms of weight or scale, it's the subtle tweaks and changes that, for both existing users and newcomers alike, will add up to a better overall experience. Well, for the most part anyway: if there's one thing we don't like about the MkII it's the amount the front thumbwheel protrudes from the camera, as it's far too easy to knock out of place, as we did many times during testing.

However, that's our only real gripe. The rest is positive: take a look at the new grip, the mode dial's lock/release button, the 2x2 switch on the rear to double-up function capabilities (as per the E-M1), the two additional function buttons atop the camera (making four physical ones total), the better placement of the on/off switch (also up top) - it's otherwise a better arranged camera that shows Olympus' experience from its previous three OM-D models (E-M5, E-M1, E-M10).

The body offers the same splash- and dust-proofing as before, but is now rated freeze-proof to -10C too. So if you're a photographer who likes to explore Arctic conditions then the E-M5 II has all the weather-resistance you'll need. We did test out the camera in the cold fridge-like depths of a former waste water plant which was only an issue for our numb fingers, not the camera itself. With gloves donned, however, pulling the rear LCD from the camera is a little fiddly.

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But it's the internal updates that make the OM-D E-M5 MkII a top-of-the-line compact system camera. The 5-axis image stabilisation system - which counteracts pitch, yaw, roll, and vertical/horizontal shift - has been redesigned to deliver stabilisation said to be good for 5-stops, claiming to be the world's best built-in system. It's undoubtedly impressive, although image stabilisation can't always save a given situation - subjects do move, after all, so shutter speeds need to be considered.

In the dim conditions of our fire-lit preview, we got our first taste of that new system. Although we couldn't directly compare to the original E-M5 model at the time, the Mark II is undoubtedly impressive. We were snapping 1/4th second shots that appeared to remain sharp - excluding any subject movement, of course - when previewing on the rear LCD screen. For round two we persevered in forcing the camera to use slow shutter speeds, taking some shots at 1/20th second or less and still resolving a sharp image.

One potential downside of the stabilisation system is that it cannot work in tandem with lens-based stabilisation, should you have a Panasonic Micro Four Thirds lens attached, for example. It's a case of one or the other, rather than enabling the lens to combat horizontal and vertical movements and the body counteract roll, pitch and yaw. Can't have it all, we suppose.

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Olympus OM-D E-M5 Mark II preview - sample shot at ISO 2500 - click for full size JPEG crop

We pressed Olympus as to whether this latest 5-axis system mirrored that found in the Sony Alpha A7 II, but the company categorically stated that it is not. Often there is an assumption the two companies share technologies, given Sony's significant stakeholding in Olympus Corporation, but that isn't the case here.

The Micro Four Thirds sensor housed in this complex stabilisation system is "more or less the same" - Olympus' words, not ours - 16-megapixel one found in the rest of the OM-D range, so no giant leap forward in that department. It shows the saturation of imaging abilities across all imaging devices of late, across all camera manufacturers, showing small progressions rather than giant leaps. Not that's a bad thing: the lead image of this preview piece was shot using an OM-D E-M1 set to ISO 20,000. Looking good, isn't it? The E-M5 II is similar in terms of results, except for slightly more aggressive high ISO noise reduction.

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Olympus OM-D E-M5 Mark II preview - sample shot at ISO 6400 - click for full size JPEG crop

Shooting dim-lit model shots at ISO 6400 to test out the camera's abilities, we found the JPEG files were a little smeary around detail areas, such as a model's smokey eye make-up. Sure, subject movement can play a part in the lack of detail, but having shot dozens at different shutter speeds, results were similar. Not bad, mind, just what doesn't seem like a push forward compared to the first generation.

At the other end of the ISO sensitivity scale, however, things are super sharp. Using the Olympus 12-40mm f/2.8 lens the ISO 200 shots look crystal clear, right down to the detail in tree branches.

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Olympus OM-D E-M5 Mark II preview - sample shot at ISO 1600 - click for full size JPEG crop

Aiming somewhere in the middle produces great results, with an ISO 1600 sample shot of fruit in a bowl revealing stacks of detail and punchy colours. However, as the camera is brand new we've not been able to dig into the raw files just yet, but have some on card while we wait for software to catch up.

However, it's not the 16-megapixel output of the sensor that excites us the most, it's High Res Shot that shows off some rather ingenious thinking. Using the stabilisation system's movements the E-M5 Mark II can take eight consecutive images, moving the sensor by half a pixel for each (in an square arrangement, through an anti-clockwise motion), then compile the results into one huge 40-megapixel final image. It's even possible to shoot 64-megapixel raw files in this fashion - but, again, we can't look at this just yet, the preview file showing only 0 x 0 dimensions).

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There are inevitable limitations with this mode, namely that the camera has to be secure and subject movement absent. You won't get a decent landscape if there's any wind movement, for example, while long exposures in low light might result in oddities from cloud movement and so forth. But for giant still life studio shots - and the 0-50-second programmable delay between the eight frames gives enough time for flashes to recycle power - or architectural work there's great potential.

We mounted the E-M5 II on a tripod with the mode active to shoot a workbench scene with books, bottles, gloves and other high-detail subjects. Selecting the High Res Shot mode is easy enough from within the drive mode setting, but we're confused why the dedicated mode dial doesn't have an option available instead - would make it much easier. With the camera setup a single shutter press shows a preview shot, before the camera then takes another eight frames, but as these each look the same it's not possible to tell that anything is happening - a "processing" symbol, or such like, would be really handy - before a quick three seconds of "busy" processing occurs.

Other than such usage foibles, the results from the High Res Shot mode are exceptional. It's really not a gimmick and short of buying a 50-megapixel Canon EOS 5DS or Nikon D810 will do specific shots proud. Medium format for £1,250? Not a long way off. Just take a look for yourselves.

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Olympus OM-D E-M5 Mark II preview - 40MP High Res Shot sample (ISO Low, f/8.0) - click for full size JPEG crop

Another aspect the E-M5 II shares with the E-M1 is the built-in electronic viewfinder. It's a huge panel, thanks to 0.74x magnification, delivered with a crisp 2.36m-dot resolution. Save for the Fujifilm X-T1, it's as good as electronic viewfinders get. Yes there's still a bit of ghosting and lag in dim conditions, but compared to the original E-M5 it's streets ahead.

Using the camera feels typically Olympus too: it's second nature if you're familiar with the company's menu arrangement, but that may take some getting used to if you're sided with another brand or new to it altogether. Features such as the 2x2 switch are a real beneficial feature for opening up a multitude of controls. Aside, that is, from its slightly awkward placement in relation to the vari-angle screen - we found it fiddly to flick the switch between its two positions unless the screen was pulled out and away from the camera body.

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A flick of this 2x2 switch gives the camera's two thumbwheels a dual lease of life, with a secondary function available when in position two. Let's say you've just used to rear thumbwheel to stop down to f/8, but want to tweak the white balance - a simple flick of the switch and the same thumbwheel will control both without the need to dig into the menus. It's also possible to customise its action to suit your own personal preferences. Excellent stuff.

On the movie capture front the ability to capture 1080p resolution at 60/50/30/25/24fps and at up to 55Mbps shows an improvement compared to the earlier model. But there's no high frame-rate, no 4K capture, with Olympus instead showing off how the 5-axis stabilisation system acts like a built-in Steadicam whichever lens is attached. True though that is - and we had great fun shooting our own mini movie with a production company, actors and all - we think the company should have aligned itself with the likes of the Panasonic (GH4)Samsung (NX1) and Sony (A7S, via an adapter). Still, the stabilisation is mighty impressive in this department.

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Olympus OM-D E-M5 Mark II preview - Livecomp long exposure sample (ISO Low, f/6.3) - click for full size JPEG crop

The last mode we put to the test by painting with light. Accessed by scrolling the shutter below Bulb and Time settings, the aptly-named Livecomp setting is used to show real-time (more or less) long exposure, but avoids over-exposing by taking an initial reference frame and filling in lighting adjustments as they happen. It's not a new setting, as we've seen it on Olympus models of past, but it's a really clever option that will fit a specific niche. No other manufacturer offers such a solution.

Elsewhere the E-M5 II offers built-in Wi-Fi for sharing images, a 1/8000th sec mechanical shutter or a silent 1/16,000th sec electronic shutter. And while the super-fast 10fps burst mode may sound a significant leap ahead of the original E-M5's 6.5fps offering, that's all set to change: new firmware will see the original model attain 9fps, putting it only a touch behind its successor. That's Olympus showing the love for existing users alright.

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Image quality and autofocus ability may not see giant leaps forward from first- to second-generation models, and there's no 4K video, and the front thumbwheel protrusion got in the way all too often, but the Olympus OM-D E-M5 Mark II otherwise shows plenty of high-end promise from what we've seen.

From High Res Shot and Livecomp, the niche areas are undoubtedly covered, but such treats don't come at the expense of the rest of the system: from swift autofocus, a great viewfinder, and that 5-axis stabilisation, the Olympus OM-D E-M5 secures its place as one of the best compact system cameras out there. So much so that, in many ways, it undermines the top-spec OM-D E-M1.