Here you go, two pictures from yesterday afternoon, taken in difficult late afternoon winter sunshine, one taken with a Panasonic G3, the other with an iPhone 4s. But which is which?
Obviously, the iPhone image is half the resolution of the 16 Mpixel G3, but with a degree of Photoshop and with both downsized as JPEG files, I think you'll agree the, um, phone does a creditable job as a camera. The camera, on the other hand, wouldn't work as a phone, no matter in which direction I pointed it, or how loud I shouted into it. Nor would it let me look at my email, or check the traffic situation on the M3 going home from Winchester.
I think if your main interest was in simply recording what things looked like, and sharing small images with other phone and computer users, then the iPhone 4s is actually pretty remarkable. Though it does cost rather more than many decent cameras, of course...
On the other hand, I am very pleased indeed with the used G3 I bought a couple of months ago (having looked at the specs of the GX1, and thought, why not go for the same sensor with a built-in viewfinder?) and am perfectly happy with the free LG P500 Android smartphone that came with the cheapest pay monthly contract on Orange. The camera on that phone really is a POS, but everything else is fine.
Until someone comes up with something compellingly new -- say, the sort of array of linked multiple smartphone imagers that several people have proposed as a potential portable digital view camera (now wouldn't that be something?) -- I can't see serious photographers abandoning cameras any time soon, except as an equivalent to the "toy camera" work that some people do with Holgas, Dianas, and the like. And the iPhone is already too good for that, I'd say. But "convergence" is clearly the name of the game, and it can't be long before smart-ness starts being built into cameras. It would be handy to save backups of one's files in the Cloud, for example, or to email them to the News Desk, or to receive firmware updates directly.
I think I'd feel an idiot holding a camera to my ear, though.