Canon is basically a tech company, and if a tech company is being innovative, then sooner or later they are going to be out of business. I also don’t think you can look at current sales to determine if a company will be successful, or profitable, in the future.
If Canon, Nikon, Sony and the other players don’t continue to deliver innovative products, then sooner or later they are going to be the next Blackberry/Nokia.
I'm sure we've got a bunch of engineers around who can comment with more authority than I can, but I believe there are several places where R&D investments are applied. There's basic research (stuff that generates patents), product development (turning basic research into a desirable and cost-effective product), tooling, etc.
It's entirely possible that Canon's basic research is on par with Sony / Nikon / Pentax, or even better. My understanding is that it's often cheaper to turn older tech into products than newer tech, so they won't do it until they have to. We won't know what Canon is capable of doing until the market forces them.