For 'happy snappers' the smartphone is the perfect tool.
For those that wanted slightly better image quality and more control, then the P&S was the solution. However this is the segment of the market that is being heavily eroded by the camera phone. Other than the size factor, it is not such a big step up from a P&S to an entry level DSLR. I can see the compact sector of the DSLR market being very competitive and highly innovative as the camera manufacturers try to find more ways to wean the happy snappers off their camera phones.
Hopefully the innovations will flow on to the enthusiast/semi-pro sector.
I'm obviously a dinosaur because for me, if it ain't got a proper viewfinder, it ain't a proper camera.