Has anyone considered that the DSLR market may simply have become saturated? Every market has a saturation point, where a majority of potential buyers already has one of whatever it is being offered (ILCs in this case). Canon wants their users to turn around and buy a new DSLR every 2-3 years (for high end stuff), and based on their release cycle, every 1-2 years for the low end stuff.
Economies, despite "recoveries", are still tight for most middle class workers, and have always been tight for lower class workers/the unemployed/welfare. That lowers the saturation cap, and reduces "replacement/upgrade" demand. I don't think people want to or even can replace their cameras every couple of years. There is also a threshold of quality...ILCs are pretty high quality these days, in terms of build...materials, ergonomics, fit and finish, feel, etc. I think people are less likely to replace a great device as often as a cheaper one.
I can totally see P&S sales being stolen by smartphones and other mobile devices with cameras. I can even see some of the Rebel-level sales being stolen as well, although not nearly as much. It seems more likely that the ILC market (at large, not just Canon) is reaching or has reached a saturation point. It's already a global market, unlike smartphones which still have expansion potential in newer economies like China and India (where there are potentially billions of customers), so I don't know if there is a lot of room for expansion. The market will probably settle, find some kind of equilibrium with new buyers from new people (young families, new photographers, etc.), replacement buyers looking for an upgrade or to replace a broken camera, etc.
If some disruptive new technology finds it's way into consumers hands at some point that can produce high quality images, then the ILC market would then probably slide into a long term decline. Dunno if/when that might happen, though.
