Canon and other camera manufacturers have been losing sales (particularly in the low end) in the last few years. Part of the reason is the much higher quality cameras found in high end smartphones. Some people have decided the photos taken with their smartphones is good enough and the new iPhone 6 will go even further to reinforce that point. Certainly Canon is concerned about the competition from Apple and Samsung's high end phones but my own feeling is their apprehension is misplaced.
I believe those who will trade a high end PowerShot camera for a high end smartphone with camera to take photos are mostly interested in convenience first. Those who are passionate about photography, like yours truly, will own and generally carry both. There may be some overlap between the two groups but by and large, I think they are mostly mutually exclusive.
The best way for Canon and other camera manufacturers to stay competitive is to keep producing high quality, innovative photographic products, like the EOS-7D Mk II camera and cut down on some of the fluff and marketing glitz. Photographers will respond to genuine improvement and not same old technology, wrapped in new camera and lens housing.
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