Canon UK Press Release

LONDON, 31 May, 2006 – Canon Europe’s position as a leading provider of imaging technology solutions has been reconfirmed by IDC, ahead of the release of the industry analyst’s forthcoming Western European digital camera market forecast report , in which Canon is positioned as the 2005 market leader for the fourth consecutive year. The forthcoming IDC sector report will show that, despite increased market competition, Canon has retained the No.1 position in 2005 and claims 16.5% of the overall Western European digital camera market, which saw total shipments of 27 million units (up from 25 million in 2004). IDC has calculated combined sales for Canon in 2005 of more than 4 million units for SLR (D-SLR) and compact digital cameras, allowing the company to double its lead over closest competitor Sony from 2.8% to 5.6%.

Head of Canon Consumer Imaging Europe, Møgens Jensen said: “We are delighted to retain our No.1 position for Western European digital camera sales once again this year. Canon’s innovative designs and advanced optical technologies have contributed to the popularity of our cameras, whether they are aimed at novice or professional photographers.”

Commenting on the future of the digital camera sector, Jensen added: “As the market matures, we expect that a shakeout will result in the departure of many camera vendors. In a few years’ time we expect only two to three players to remain.”

The IDC research will conclude that Western European household penetration rates reached 40%-41% in 2005 and the sector will now reach its anticipated plateau. In an increasingly competitive market, IDC predicts the next big potential growth opportunity in 2006 will be in converting and capturing entry level, non-digital users.

Paul Withington, Research Manager, European Peripherals at IDC, co-author of the report, said: “The 2005 Western European digital camera market saw continued year-on-year growth of 8.2% but at a slower rate than expected. As this slowdown continues into 2006 and market saturation reaches its peak, competition will be fierce. We predict a huge drive by the major camera players to be first in the race and capitalise on the key growth opportunity at entry-level that conversion of analogue camera users to digital presents.

“Canon is an established and trusted brand synonymous with high quality digital cameras and is well positioned to capture and convert at entry-level, whilst sustaining growth amongst both ‘prosumer’ and high-end, point-and-shoot users.”