I think that this is a good link for a lot of people to think about right now. It was posted on digital photography school, which I featured before and it talks about how to be inspired by other photographers without being intimidated. One thing that it didn't cover is how to be inspired by other photographers without becoming a hater.
It is a pretty common tendency, especially when sales are down and the economy is slow, for people to get a little touchy about competition. Being the new kid on the blog I have felt it a lot. Some photographers feel that they more people hanging their shingle the fewer clients that they will get because there are only so many people to go around. Fact of the matter is, if a certain client doesn't like your work they aren't going to like it whether you have one competitor or fifty. The opposite is also true. If a client sees your photos and something clicks for them and you are "the one" for them it won't matter how many other people that they had to look at to find you.
That said, doesn't it make sense to try to work together and make local photography friends? They can help you out if you get in a bind, you can compare slide show programs with them when you are deciding which to purchase...you get the idea. Everyone out there has something of value to contribute and fear is no reason not to get yourself out there and learn from each other.
If you are still concerned about losing business maybe you should focus on the things that you can change. You can't (legally) control the number of people who are charging for photography in your area, but you can work on honing your marketing efforts to your target market. Still not sure who your target market is? Market research can give you the facts you need to feel more confident. And of course, practice!
Hope that you all have an amazing Labor Day weekend!