Canon Brand Captured Number One Market Share in 1H06

LAKE SUCCESS, N.Y., Aug. 24, 2006 –Canon is strengthening its leadership position as America’s choice for digital cameras. In a recent IDC study*, the Canon brand captured number one position for total digital camera shipments in the first half of 2006, with a market share of 21.0 percent (which is up from 20.2 percent in 1H05).

“As the digital camera market matures, it is more important than ever for camera vendors to meet dealer requirements for timely product introductions, and properly address consumer desires with compelling designs and feature sets,” said Christopher Chute, research manager for the worldwide digital imaging practice at IDC. “Canon continues to properly execute on these critical principles.”

“Canon’s long 70-plus year history of expertise in the photographic industry positions us for such market leadership,” said Yukiaki Hashimoto, senior vice president and general manager of the consumer imaging group at Canon U.S.A., Inc. “We are proud to be the camera of choice for consumers and professionals. We are the only camera company today that truly offers a full line of consumer and professional digital imaging solutions. By designing and manufacturing our own lenses, CMOS image sensors (found on the company’s digital SLRs) and image processors, we can control both image quality and cost – ultimately providing consumers with the best digital imaging options.”

More and more customers have come to recognize the high quality and reliability that Canon designs into its entire range of digital cameras, from the highly acclaimed PowerShot series to the full line up of award-winning EOS Digital SLRs. The digital camera category is clearly one of the best selling hardware segments in the photographic industry, and it is one of the most competitive. In the digital camera category, Canon has consistently turned in strong performances, thus enabling the company to expand its market share. In fact, IDC currently forecasts U.S digital camera shipments to reach more than 31 million units in 2006, an all-time high.

A Brief History of Canon’s Progress in the Digital Camera Market
Canon’s success in the digital camera market was not built overnight. The company’s first internally developed model, the PowerShot 600, was announced in 1996 and originally marketed as a computer peripheral through a subsidiary company. When it became apparent that the future of digital cameras was going to be in the consumer market, Canon reorganized itself from the top down and assigned responsibility for design, development, manufacturing and marketing to its Camera Division, which had a long history of success in traditional 35mm cameras. When the PowerShot S100 Digital ELPH and EOS D30 Digital SLR models appeared in 2000, their unique and innovative features catapulted Canon into the spotlight of media publicity and popularity with consumers. At that point, it was clear that Canon was on its way to the kind of success it had come to expect after nearly 25 years of market leadership in the traditional camera industry.

Advertising taglines such as “Make Every Shot a PowerShot” have sparked popular interest in the Canon brand. Each year, Canon gains market share and becomes more popular with consumers – one reason for Canon’s success is the breadth of its offerings. With class-leading products in the compact, consumer, advanced amateur and professional digital SLR categories, Canon appeals to a wide range of photographers. As the digital camera market grows, so has the success of Canon’s revolutionary products and technologies.

To support its success, Canon designs, develops and manufactures its own lenses, image sensors, image processors and color rendering software. With consistently high annual investments in research and development, Canon continues to stay ahead of the market with its innovative imaging technologies, such as UA (Ultra High Refractive Index Aspherical) Lens Technology, the DIGIC II (Digital Imaging Integrated Circuit) and DIGIC III image processors, as well as Canon CMOS image sensors for the company’s EOS Digital SLR cameras.

Canon, which is one of the top holders of technology patents in the U.S., has created a unique synergy between its research and development team and its product groups that allows it to consistently introduce high quality and reliable imaging products for every level of user. In fact, the editors of PC Magazine honored Canon’s digital cameras with the highest rankings in quality, reliability, and support in their annual reader satisfaction survey in both 2004 and 2005.

For more information on the history of Canon cameras, please visit www.canon.com/camera-museum/.

About Canon U.S.A., Inc.
Canon U.S.A., Inc. delivers consumer, business-to-business, and industrial imaging solutions. The Company is listed as one of Fortune's Most Admired Companies in America and is rated #35 on the BusinessWeek list of "Top 100 Brands." Its parent company Canon Inc. (NYSE:CAJ) is a top patent holder of technology, ranking second overall in the U.S. in 2005, with global revenues of $33.3 billion. For more information, visit www.usa.canon.com.

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*IDC, U.S. Digital Still Camera 1H06 Vendor Shares, Doc #202921, Aug. 2006