But what does “better than my phone” picture quality actually mean?
One of those key differentiating factors has been the “pretty blurry background” effect that an interchangeable lens camera is capable of producing: sharp focus on the subject, a soft blurry background. And you know that your phone can’t do it – until now.
Smartphone cameras can’t get any bigger than they already are, but they can get smarter. Several phones can do blurry background effect with their tiny cameras with some “software magic.” Once smartphones can do a reasonably good imitation of things like bokeh and optical zoom (we are getting there), those who never wanted to pick up a dedicated camera won’t have to.
Lots of people who do want the image quality benefits traditionally associated with a DSLR actually want nothing to do with a DSLR.
It’s not even a question of if the $500 ILC becomes obsolete, it’s a matter of when. And when may actually be right now.
For most people, smartphone cameras will be good enough for casual photography. There will be some market for higher end cameras for professionals, but the entry level camera (point and shoot) market is eaten by smartphones.