Interesting graph. I wonder how that breaks down between cheap cameras and higher quality ones.
My sense is that phone cameras are great for average pics or pics in relatively benign settings. That has been my experience as even my older Samsung 5 takes an awesome pic. But when I wanted a tool for more adventurous activities I sought a dedicated P&S so I wouldn't risk breaking my phone or wearing the battery down on my emergency communication device. At the same time, I didn't want to buy a camera that took worse pics than my phone, and wanted some other features like RAW and manual settings so I looked at the upper tier choices. So I could see phones wiping out the lower tier camera market that way.
Some might wonder why not a full DSLR camera for great pictures but those come with some down sides for outdoor pursuits. They are usually too heavy to run with, somewhat delicate and waterproof housings cost thousands instead of hundreds.