The fierce competition in China's digital camera market may cause second-tier brands such as Casio, Kodak, Olympus and Pentax to gradually step out of the market as their market share is dropping rapidly.

Sources from digital camera brands pointed out that Canon is currently the largest digital camera brand in China with 35% market share, followed by Sony, Samsung Electronics, Nikon and Fujifilm. Since Samsung has been investing heavily in R&D and marketing, the company's market share in China rose from only 3-4% in 2006 to about 16-17% currently.

Since digital camera vendors are increasing their specifications while reducing prices, second-tier brands are having difficulty raising their share. Pentax, after being acquired by Hoya in 2006, has already moved its focus from digital cameras, while Kodak and Olympus are both seeing their sales dropping.

However, some second-tier brands such as Fujifilm and BenQ are still seeing strong performance. Fujifilm, benefited from its new production strategy and is capable of preserving profits despite fierce competition, while BenQ is mainly targeting prices below 1,500 yuan (US$226) to maintain its market share.