An optical indicia reading terminal comprising: a microprocessor coupled to a system bus; a memory communicatively coupled to said system bus; an image sensor integrated circuit comprising a two-dimensional color image sensor including a plurality of pixels and an image data extracting module, wherein said image sensor integrated circuit is coupled to said system, bus and communicates with said microprocessor; wherein said image sensor integrated circuit is configured to read out a plurality of analog signals, each analog signal of said plurality of analog signals being representative of light incident on at least one pixel of said plurality of pixels; wherein said image sensor integrated circuit is further configured to derive a plurality of luminance signals from said plurality of analog signals, each luminance signal of said plurality of luminance signals being representative of a luminance of light incident on at least one pixel of said plurality of pixels; wherein said image sensor integrated circuit reads out said luminance signals as independent luminance information extracted by said image data extracting module; wherein said optical indicia reading terminal is configured to process said frame of image data for decoding decodable indicia; and further comprising an illumination assembly control module in communication with said microprocessor via said system bus, said illumination assembly control module controlling a light source bank and aiming pattern light source bank, and a variable focus imaging lens controlled by focus control module to utilize a relatively lower level of illumination output for shorter focus distances and a relatively higher level of illumination output for longer focus distances. a microprocessor coupled to a system bus; a memory communicatively coupled to said system bus; an image sensor integrated circuit comprising a two-dimensional color image sensor including a plurality of pixels and an image data extracting module, wherein said image sensor integrated circuit is coupled to said system, bus and communicates with said microprocessor; wherein said image sensor integrated circuit is configured to read out a plurality of analog signals, each analog signal of said plurality of analog signals being representative of light incident on at least one pixel of said plurality of pixels; wherein said image sensor integrated circuit is further configured to derive a plurality of luminance signals from said plurality of analog signals, each luminance signal of said plurality of luminance signals being representative of a luminance of light incident on at least one pixel of said plurality of pixels; wherein said image sensor integrated circuit reads out said luminance signals as independent luminance information extracted by said image data extracting module; wherein said optical indicia reading terminal is configured to process said frame of image data for decoding decodable indicia; and further comprising an illumination assembly control module in communication with said microprocessor via said system bus, said illumination assembly control module controlling a light source bank and aiming pattern light source bank, and a variable focus imaging lens controlled by focus control module to utilize a relatively lower level of illumination output for shorter focus distances and a relatively higher level of illumination output for longer focus distances.