I wouldn't worry about HP too much. Canon is by far the better-managed company, and I don't expect Canon will lose much global market share to HP.
I think the issue here is more the sudden earnigns growth slow-down. We all knew it was coming. Canon's earnings growth over the past several years was fueled by increasing margins and internal optimization, but there was a limit to how far Mitarai and co. could take that. At some point, earnings growth had to slow to match revenue growth. The knowledge that this was coming was part of what was keeping the P/E down.
Still, the thing to remember is that, growth or no, this company is making money hand-over-fist. The slowdown we just saw was already factored into the price by the major holders. Some of our upside did just disappear - the easy growth is over - but we are below fair value and if you can afford to wait we should be heading up from here.
It appears undervalued to me. Unfortunately, undervalued situations can persist for very long times. Despite the recent earnings disappointment, I am comfortable holding here and even adding a few shares. Canon sits on $8/share of cash and no debt to speak of, as well, so their already low PE can be considered to be even lower if you take the cash out. Historically, it's had a higher valuation, so good upside potential is still there, I think. If I'm wrong, I think the downside is limited. There are no guarantees in life but you want to maximize your chances, so Canon still looks like a decent bet.