Nikon has announced the permanent closure of its digital camera factory in the Jiangsu province China. Ultimately, Nikon says they’ve made the decision based on the fact that the compact digital camera market has be deteriorating, and Nikon blames it all on the rise of smartphones.

“In recent years […] due to the rise of smartphones, the compact digital camera market has been shrinking rapidly, leading to a significant decrease in operating rate at [Nikon Imaging (China)] and creating a difficult business environment,” Nikon says.

Nikon says that their decision to close the factory was due to smartphones products chipping away at their compact camera business. Nikon’s board of directors made the decision to close Nikon Imaging (China), which has been manufacturing digital cameras and DSLR lenses since 2002 when it was opened in Wuxi City, Jiangsu.

It’s reported that the factory provided employment to 2,285 last month, meaning the closing would lead to major job loss.

The compact camera market has been quickly declining ever since 2011, when smartphone camera quality started to rapidly improve. Now, the compact camera market is a shadow of what it once was even half a decade ago.

“The global market for compact digital cameras has shrunk to a tenth of its peak within the past decade,” the Nikkei Asian Review reports. “[Nikon] expects to sell 4.8 million digital cameras overall in the year ending March 2018, down 24%. For the compact segment, sales are projected to drop 28%.”

Now, Nikon says that they will be focusing on more “high value-add products,” referring to things like DSLRs and mirrorless cameras. Nikon continues to manufactures its digital camera equipment at factories in Japan and Thailand.

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