It's a popular exercise with tech writers to declare product categories dead because of the iPhone or smartphones in general. Everything from GPS devices to alarm clocks to my editorial category at CNET Reviews, point-and-shoot digital cameras and camcorders.
It would be silly for me to try and argue that smartphones haven't played a part in slowing the purchase rate of compact cameras; I'm fairly certain they have. It would also be silly to say smartphones aren't legitimate photo tools or great for that shoot-and-share experience. However, saying that it'll be the death of the entire category is ridiculous as is suggesting that only high-end compacts and dSLRs will remain.
People with smartphones tend to forget that the whole world doesn't have or want a smartphone or their accompanying data plans. This is especially true of tech writers who are generally surrounded by people with the latest and greatest gadgets (I'm certainly guilty of it). Just because everyone around you has abandoned a point-and-shoot in favor of their mobile device's camera, doesn't mean no one's buying them or using them or wanting them.
The point-and-shoots that are mostly losing to smartphones are the entry-level compacts and ultracompacts. That makes sense since a cheap camera has a lot in common with what you get in a smartphone: slow performance, limited shooting controls, and photos that look good at small sizes, such as when viewed on a 3.5-inch LCD. The starting price for value-added cameras, where you start to get better features, image quality, and performance, is about $180 right now. The thing is, as time and technology move forward, the high-end features trickle down to the entry-level cameras and will eventually give you more of a reason to keep one handy.
There are also several things you get with a compact camera that you simply don't with a smartphone. The most obvious is a long optical zoom or any optical zoom. This alone will keep people buying point-and-shoots over using their phone or a dSLR. Megazoom cameras aren't pricey or bulky anymore either; a very good 10x compact megazoom can be had for less than $200 or even below $150. These are not "advanced" cameras, but just point-and-shoots with long lenses.
Shooting performance is another advantage over smartphones. There's no denying that having a camera in your phone means fewer missed photo opportunities. But having a pocket camera that's actually capable of starting and shooting in less than 2 seconds can mean the difference between getting a shot or getting the shot you want. Shutter lag and shot-to-shot times are also pretty bad with smartphones. While not all point-and-shoots offer fast shooting performance, the manufacturers definitely know speedy shooting sells cameras, so it's something they're constantly improving on. And as long as people want to take pictures of their kids and pets and don't want to lug around a dSLR, there will be point-and-shoots.
Lastly, I've read enough user reviews and gotten enough angry e-mails to know that photo quality is important regardless of the type of camera or its user. So if you think only photography enthusiasts care about quality, you're mistaken. Photos that are "good enough" are only that until you need them to be better and then you're kicking yourself for not bringing your pocket camera. Oh, and while photo apps are great, most new point-and-shoots offer similar editing capabilities, filters, and photo effects. Listen, if all you ever do is post photos to Facebook and Flickr and think that megapixels are what defines photo quality, then fine, your smartphone's likely "good enough." But for less noise, great color, correct exposure, and sharp details, you can't beat a very good point-and-shoot with a phone.
Right now, the biggest edge that smartphones have over point-and-shoots, aside from their all-in-one nature, is sharing. Without the always-on connection of a broadband network, getting your photos off your camera and onto a social networking or photo/video sharing site requires more of an effort. Cameras with built-in Wi-Fi or Bluetooth are rarities and we've yet to see one that worked really well. Kodak's done a good job with its Share button allowing you to tag photos in camera to e-mail or post to various sites, but it requires you to connect to a computer to send them. The best solution currently is to use an Eye-Fi card wireless SD card, but that still requires a network connection.
I know that for a lot of people a smartphone is all they need for a camera. Or a smartphone and a dSLR. But there will still be plenty that want more than their smartphone can offer, but don't want the size or expense of a dSLR. In other words, they'll want a point-and-shoot.