Although the worsening of general economic conditions, such as the inflation, material shortages, unemployment, and credit availability, can adversely affect Canon's results of operation and cause downturns and declines in consumption in our major markets, including Japan, the United States and Europe, the digital camera market continues to show strong growth in Japan and overseas, supported by robust demand. The Canon Group believes that greatly improved profitability for camera products will be realized through the rapid rise in sales of digital cameras coupled with effective cost-cutting measures and a decline in the price of electronic components. .
B. Technological.
The digital camera business in which Canon operates is highly competitive.
Presently, the conventional film camera segment of the market is mature with anticipated declining industry revenues as the market transitions to the digital technology. Some of Canon's new digital products replace or compete with its traditional analog products. Today, Canon announces the Digital IXUS i, the most petite and undeniably chic new member of the legendary IXUS collection. It is irresistible with its beautifully crafted design, available in four stylish colours, and is the smallest Digital IXUS ever. Comparing to the product Digital IXUS II and other products on the market, all the customer-oriented technological innovations that have taken place in the aspects of effective pixel, digital zoom, closest focusing distance etc. in Digital IXUS i, give the new product an opportunity to replace the old ones.
C. Political Legal Regulatory.
Canon is subjected to a wide variety of laws and regulations as well as industry standards relating to energy and resource conservation, recycling, global warming, pollution prevention, pollution remediation, and environmental heath and safety. Some of the environmental laws which affect our businesses are summarized below.
