Disclaimer: I don't own a smart phone, iphone or any other portable phone device that allows me to connect to the internet. My cell phone is old, can only be used to make and receive calls and I'm happy with it.
IMO, the iphone4s is a sign of things to come. My guess is that camera manufacturing companies will soon jump on the smart phone bandwagon and start investing all their research & development efforts/funds to develop more advanced phones with better picture-taking abilities to appease the mass market.
While I might find this new trend disappointing mostly based on my love for old, mechanical cameras, I have no other choice but to sit back and watch it happen (much the same as I did when low end digital point and shoots stomped out film in the name of "progress"). In a few years we will see very little, if any, new cameras on the market as it will be saturated with ever-convenient smart phones.
Being the dinosaur that I am, I will hold on to my DSLR's for as long as I can as I did my film SLR's despite the ridicule of younger, more tech-savvy erudites.