Nikon’s global net profits fell 63% in the year to 31 March despite a 11% rise in demand for digital SLRs and a 21% surge in unit sales of compact cameras. Meanwhile, sales of Nikon lenses shot up by 9%.

Nikon recorded an overall net profit of 28.06 billion yen, down from 75.48 billion yen the year before.

Nikon said that its market has been affected by price competition driven by the growing number of manufacturers entering the camera arena.

The Japanese firm said in a statement today: ‘Competition is intensifying with respect to digital cameras, with both Japanese and overseas electrical equipment manufacturers entering the market in addition to the traditional camera manufacturers.

‘As the product life cycle is short, particularly in the case of compact digital cameras, all companies have the tendency to try to sell mass-produced products within a short period, further spurring price competition, in conjunction with slowing market growth and economic fluctuations.’

Nikon added that, in general terms, the digital camera market has continued to expand, despite ‘stagnant personal consumption’ during the second half of the year brought about by the global financial crisis.

However, the firm said it expects to see a slight decline in unit sales of cameras and lenses over the coming year.

It forecasts a 0.6% fall in demand for DSLRS and a 3.1% drop in sales of compact cameras, while it predicts that its lens sales will fall by 1.4%.