Yesterday, Canon Inc., the world's biggest camera producer, cut its forecasts on yearly profit and sales. It said that the company currently faces slowing demand for the high-end models that present interchangeable lenses. Canon added that the decrease in demand makes its JPY983 billion or US$10 billion business at risk.

On Tokyo Stock Exchange, Canon's share plunged the most in three months. Canon stated that its net income would probably be JPY260 billion in 2013. It cut its JPY290 billion April projection by 10%.

In the whole world, the shipments of cameras slumped to a 10-year low due to the increasing popularity of phones made by Apple Inc and Samsung Electronics Co. The consumers, nowadays, would take pictures using mobiles equipped with lenses that were capable of high-quality photos.

"The cannibalization effect on compact cameras by smartphones has become quite serious," Goldman Sachs Group Inc's Tokyo-based analyst, Toshiya Hari, said. "Canon will have to find a new growth driver. I can't imagine the camera market will grow much further in the coming decade."

Goldman Sachs further lowered its share price forecast for Canon from JPY3,400 to JPY3,270. It said that "the underlying situation looks severe." Furthermore, Nomura Holdings Inc. cut its target by 14% to JPY3,617.