If you are still not convinced that the cell phone is killing the low end digital camera market, just take a look at the picture below. I took this picture today on my way home from work. A crowd of teenage girls were photographing some celebrity at CityTV. I know this is just a very narrow age group of users, and adults should have a higher percentage of "real" cameras users than teenagers. Still, the writing is on the wall for low end dedicated digital point and shoot cameras.
Cell Phones Vs. Cameras - NEX-5N & Wollensak Raptar 50mm f1.5 @ f2.8. Click for larger.