UPDATE [Fri, 12/15]: The original review of the Panasonic AE1000 was published on November 17 based on a late generation pre-production sample. We received a final production unit on Wednesday, December 13 which incorporates several important enhancements that were not present in the sample previously reviewed. All production units that have been shipped contain the updates, so buyers need not be concerned about whether a unit they get from a dealer is up to final standards.

The primary concern we had with the original unit we tested was a softness in the HD image. Due to this flaw we had rated the AE1000 4 stars in performance. However, Panasonic changed the lens and lens housing in the final production unit, and the softness problem has been completely eliminated. Its HD image is now as sharp as any 1080p projector we have seen to date. Accordingly, the performance rating has been raise to 5.0 stars, and the value rating, previously at 4.5, has been raised to 5.0.

With the last minute improvements to the final production models, Panasonic has delivered a phenomenal projector that stands out as a truly remarkable achievement, especially in light of its aggressive price point of $3,999. We are pleased to give it our strongest possible recommendation. [EP]

Original review text, dated Nov 17, 2006:

Panasonic has just begun to ship their new and highly anticipated 1080p resolution projector, the PT-AE1000U. This fully loaded projector has a wide assortment of preprogrammed operating modes, long zoom lens range and extensive lens shift to make it as easy as it gets to install and operate. Unlike their new PT-AX100U 720p model which has very high lumen output options for ambient light "home entertainment" use, the AE1000 is designed for dark room viewing—a projector for the purist who wants elegant home theater performance and high definition 1080p imagery.

Panasonic has achieved a black level performance with the AE1000 that surpasses anything we have yet seen with LCD technology. And their Smoothscreen filter erases any hint of pixel structure. Very low levels of digital noise and excellent scaling produce the best standard definition images we've seen on any of the new 1080p products. The only weakness in image quality is a relatively soft rendering of 1080p material from HD DVD and Blu-ray. [See update above.]

Though the AE1000 can produce a bright picture, once it is calibrated for ideal cinema viewing it is not one of the brightest models on the market. Moreover, lumen output can vary greatly based on whether you use the wide angle or telephoto end of the zoom lens. So its trade-offs need to be understood and thoughtful planning needs to be done before proceeding with an installation.

ANSI lumens: 1100

Contrast (full on/off): up to 11,000:1, variable iris

Light Engine: 1920x1080, native 16:9, 0.7" three-panel PolySi LCD, with a 165W UHM lamp.

Video Compatibility: 1080p/60/50/24, 1080i, 1125i, 720p, 576p, 576i, 480p, 480i. NTSC/PAL/SECAM.

Connection Panel: Two HDMI, two YPbPr component, one VGA, one composite, one s-video, one Serial port.

Lens and Throw Distance: 2.0:1 power zoom/focus lens with vertical and horizontal manual lens shift. Throws a 100" diagonal 16:9 image from 9.7' to 19.6'

Lamp Life: Unpublished.

Warranty: Three years, as of 4/18/07.

The AE1000 comes in a simple rectangular case with a flat black finish that has an industrial, no nonsense appearance compared to the more stylized, flashy, consumer oriented packaging of projectors it competes with. It is designed from the ground up for function over form.

As far as installation options are concerned, really anything goes with the AE1000. The very long 2.0x zoom lens range, and three full picture heights of vertical lens shift provide more latitude for placement than any other 1080p model on the market. However, there is one important note of caution: The AE1000 produces its brightest images with the zoom lens set at its widest angle (shortest throw) setting. Moving the projector back as far as possible and using the extreme telephoto end of the lens reduces lumen output by 45%. Using the middle of the zoom range reduces brightness by about 25%. Thus, there is a trade-off between maximum recommended screen size and the maximum recommended throw distance for each screen size.

The manual horizontal and vertical lens shift range enables coffee table, rear-shelf, and ceiling mount deployment. In the neutral position the centerline of the lens intersects the middle of the projected image. From that point the image can be moved up or down one full picture height. Horizontal shift will allow for movement side to side of 0.5 picture widths. At the extreme ends of the shift ranges there is a drop in brightness uniformity along the far edges of the image, so if possible, it is best to avoid an installation that requires you to place the lens in those positions.

Air intakes and connection panel are on the rear of the unit, and air exhausts out of the front corners. This is the ideal configuration for rear-shelf placement. The air filter is easily removed from the side of the projector for periodic cleaning, and the lamp is accessed through the top. Both can be changed without needing to take the projector down from a ceiling mount should it be installed in that manner.

As with several of their most recent 720p home theater projectors, Panasonic has incorporated their "Smoothscreen" technology on the AE1000 as well. This is essentially a filter that eliminates all trace of visible pixelation, even when the screen is viewed from just a few inches distance. Rather than seeing distinct pixel structure up close, one sees what looks like a finely textured fabric.

Panasonic has used three 1920x1080 resolution inorganic LCD panels in this model. The inorganic design increases the stability of the panel and eliminates the concern that the panels might eventually degrade with usage over time.

There is no lamp life specification quoted for the AE1000. It has two lamp power settings—high and low. The low lamp setting reduces lumen output in all operating modes by 28%. Fan noise is low and not much of a concern when the projector is in high lamp mode, so users will not be opting for the low lamp setting to reduce fan noise. There is no indication from Panasonic how much additional lamp life is to be anticipated from operation in low mode.

The preprogrammed video-optimized calibrations that are designated "Hollywood" quality in the Owner's Manual are not particularly bright, even with the zoom lens at maximum wide angle. Use of the telephoto end of the zoom will significantly curtail what light there is. We would not be opting for low lamp mode if we were to install the AE1000 permanently in our theater, and any potential incremental lamp life in that mode would be moot. Due to the degradation of brightness of all high pressure lamps over their lifetimes, we would anticipate wanting to replace the lamp on the AE1000 every 1000 hours to keep it at or near peak performance. Replacement lamps currently retail at $400.

When we think about 1080p projectors, we generally think of the primary benefit as being able to get the maximum picture quality from the highest resolution sources available such as HD DVD or Blu-ray discs, or broadcast HDTV. But even if you acquire a 1080p projector, you'll probably want to continue watching a great deal of standard definition DVD for some time to come. And we can state unequivocally that owners of the Panasonic AE1000 will enjoy higher picture quality from standard DVD than will owners of any of the other low-priced 1080p projectors released this fall.

There are numerous factors in combination that account for this. Certainly contrast, black level, color saturation, deinterlacing, and scaling are all functioning at highly competitive levels. But in addition, the AE1000 has much less digital noise in standard definition than any of the competing products. It also has noticeably less ringing along boundaries between dark and light, and along the edges of saturated color boundaries. The result is a surprisingly clean, natural, smooth, detailed image from standard DVD that stands out as a uniquely impressive achievement.

When it comes to high definition sources, the AE1000 still performs admirably, but it loses a bit of its competitive edge. With pristine images from an HD DVD disc shot with an HD video camera, the AE1000 rendered a beautifully balanced picture as far as contrast, black level, and color was concerned. However, it was not quite as razor sharp as it should have been. The softness in the image is subtle, and it would not normally be noticed except in a side by side comparison with a sharper projector, and then only with an excellent HD DVD or Blu-ray source disc. When switching to a lesser quality HD source like broadcast HDTV 1080i, the weakness in image acuity becomes less evident. We do not know the source of the softness, but we cannot help but wonder whether the Smoothscreen filter might have smoothed out the pixels a little too much, such that the super-fine detail in the best HD sources is compromised. [See update above.]

As noted previously, the lumen output of the AE1000 can range from quite bright to very dim depending on how it is set up. In its brightest and least color-precise mode, which is Dynamic, it measured over 900 ANSI lumens with the zoom lens at its widest angle setting and lamp on high. Two other relatively bright preprogrammed modes were "Normal" and "Cinema 3," both of which measured around 500 ANSI lumens. Color showed much better balance in these two settings. In addition, there are two preprogrammed calibrations which the Owner's Manual defines as optimal for Hollywood quality color reproduction. These are labeled "Cinema 1" and "Cinema 2." Both of these calibrations produced about 250 ANSI lumens, again with the zoom lens at its brightest setting and lamp on high.

Since the zoom lens setting can reduce light output by as much as 45%, the precalibrated "Hollywood" optimized modes could come in under 150 ANSI lumens if the projector was installed at its maximum throw distance from the screen. This is not enough light for anything but a small screen of 80" diagonal or less. Cinema 3, with some tweaking, yielded what for us was the best combination of color, contrast, and lumen output. From that starting point at a bright 500 lumens, it gives the user the flexibility to put the projector on a rear shelf and use more of the zoom range without ending up with a picture that is too dim, or alternatively, go for a larger screen size and ceiling mount the projector to get the maximum lumen performance.

The Panny AE1000 is unique among the 1080p competition. Assuming it is set up to deliver sufficient lumen output for the desired screen size, it is capable of producing a thoroughly engaging and competitive image from high definition sources, and a truly outstanding picture from standard definition DVD. It offers a lot of versatility as far as installation options are concerned, but it is restricted to some degree by the need to avoid certain combinations of color calibrations and lens settings that can yield an excessively dim picture.

Our primary concern was the subtle softness in the image that becomes evident only with the highest resolution HD sources. The performance score needed to be reduced because of this. On the other hand, since there is still a great deal of standard definition material on the market, and since the AE1000 clearly outperforms the competition in this area, the performance score needs to reflect this too. We have decided on a 4.0 star performance rating to average it out, but this rating is unable to reflect the true trade-off that the buyer faces: If you are willing to give up a little bit of image sharpness with HD DVD or Blu-ray in exchange for truly beautiful pictures from DVD, then the AE1000 is an outstanding choice for you. If maximum image resolution with the highest quality HD sources is really what you are looking for, and you don't care as much about getting the best possible picture quality from DVD, then the AE1000 is not your best choice. [See update above.]