Cameras are not unique in being supplanted by multifunctional devices.
A modern smart phone is a lot like the wrist- or forearm-mounted multifunctional devices of science fiction, with the only difference being that it is carried rather than worn. It's a multimodal communications device, a timepiece, a video and sound recorder, a camera, a navigational aid, an image projector, a concierge, a PA and more.
Sure, a single-purpose device of the same size and weight would do some of these things better than a multifunctional device, but the multifunctional device does it more than well enough for most purposes, and there's something to be said for versatility and integration. That leaves single-purpose devices as specialised tools for specific, demanding purposes, rather than everyday tools.
It's not just cameras (apart from the high end) which are disappearing. Many people no longer wear watches - they are now a fashion accessory rather than a timepiece. Dedicated GPS devices are becoming less necessary. Dumb phones have mostly disappeared. So have portable voice recorders. So have electronic dictionaries, electronic notepads and similar devices. Camcorders have become much less common than a decade ago. Even Gopro is suffering.
If camera makers - chiefly Nikon, but also Canon, to a lesser extent - fail to adapt, their fate will resemble Nokia's. Nokia was the king of dumb phones - another single-purpose device whose purpose was subsumed by multipurpose devices, in a similar way to what is happening to the lower end of the camera market. They failed to adapt to new markets and new technology and, as a consequence, have all but disappeared.
And phone cameras are only going to get better. In a few years, improvements in diffractive optics will allow for much larger sensors and wider apertures without increasing the device size and thickness, while electroactive polymers will allow for true optical zoom without needing an extending lens or moving lens elements. Capacitors, to replace lithium-ion batteries, already hold more energy and charge faster. They won't match full-frame interchangeable-lens cameras, but, for anything other than large prints, high-detail publications or certain technical uses, they may be good enough.
If there's one company well-placed to take advantage of all this, it's Sony. After all, they also make smartphones and other electronics, in addition to being a major supplier of sensors. It wouldn't be a stretch for them to make a string of interconnected devices, all centred around using the Xperia phone as a central controller and display.
