The immense popularity of smartphones is destroying demand for traditional point-and-shoot cameras. This is hardly news though, the trend has been present for a couple of years, but now the camera industry seems to be trying to put up a fight.

Some vendors, like Samsung and Fuji, have already rolled out smart cameras, powered by Android. However, it could be too little too late. Smart cameras are simply too pricey and although we could see Android-based bridge cameras or high-end compacts, it’s not very likely that camera makers will be able to come up with viable smart cameras in the low end.

In the meantime, shipments of digital cameras are falling off a clip. Japan's Camera and Imaging Products Association reports that shipments of digital cameras built by Japanese firms tumbled 42 percent in September year-on-year, to just 7.58 million units. Compacts were  particularly hard hit, with a 48 percent drop. Even sales of DLSRs were hurt, dropping 7.4 percent.

Analysts are now expressing fears that the entire compact camera industry could be facing oblivion. It’s hardly surprising, the MP3 player industry also went down the toilet as an increasing number of users traded in their iPods for iPhones.

However, Canon does not believe the industry is going anywhere. The company believes there will always be a market for quality snapshots and we tend to agree. Smartphones won’t be able to compete with mid-range cameras, they simply can’t accommodate quality sensors and optics. However, the low end market is an entirely different story.

More here.