Due to harsh economic conditions and growing rivalry from smartphones, sales of point-and-shoot digital cameras among Japanese firms collapsed 48 percent from September 2011 to September 2012, while sales of dSLR cameras fell by 7.4 percent in the same timeframe.
Firms are scrambling to keep improving picture quality, offer features such as water-proofing and expand their Internet features, like allowing users to share pictures through social media networks.
Camera makers say growth areas include emerging economies -- where many own neither a camera nor a smartphone -- along with replacement demand among compact-camera owners.
And the fall-off in demand has not been as stark for the pricier detachable lens cameras favored by avid photographers and growing ranks of camera-buff retirees, particularly in rapidly ageing Japan, they say.