Axis announced a small form factor, single channel encoder. They have added a data sheet on it. Also, online pricing is now available - about $300 USD. That's a pretty reasonable price for a H.264 30 fps 4CIF encoder and there are not a lot of alternatives for that form factor. Interestingly they are also offering it as a kit for convert surveillance (online price about $400 USD). Since it takes analog inputs, you certainly could choose from a wide variety of spy cameras on the market.
[Update - Axis now offers a mini/covert kit that is MP - see our P12 review.]
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