After comparing them, I'm convinced that it's only a matter of time until phones are going to catch up to full frame cameras. Software these days is more important than the raw hardware it seems...
Having recently purchased both the latest RX100 and the 11 pro, I both agree and disagree. For auto mode in certain conditions, when viewed at significantly scaled down resolutions, yes. To if you're posting to instagram or facebook or whatever, this is probably true.
Manual mode on the RX100 vs the 11 pro, even when using custom apps that expose a lot more of the camera settings, the RX100 starts to pull away. If you're doing any work with larger image sizes (and by larger I mean using a computer or TV screen instead of a phone), even more so. They're honestly not even close at that point.
Meanwhile, on the full frame side of things, the A7 line of cameras has been advancing picture quality at a rate as fast as anything in the iPhone, and just absolutely clobbers it. There's physics in play here, and I'm skeptical that software or processing power is going to increase the picture quality that much, and I have no idea how you would match things like super telephoto lenses in a smartphone form factor.
I do really love the iPhone when I just need to take a quick shot, though. All the computational stuff means that I'm almost always guaranteed to get a usable photo out of it in any condition.
What could a DSLR with iPhone-level software achieve?
The problems for camera manufacturers around this, though are:
1. Their market is incredibly, loudly regressive about a lot of this stuff. A noisy chunk of the photography market is really hostile to workflows that don't mimic hundred year old darkroom processes. Doing in-camera is an abomination. Automation is an abomination, etc.
2. Building the compute in to the camera is non-trivial. You've already got a lot of compute power focusing on running the complexities of things like continuous AF tracking (e.g. on top-end Olympus that's 4 of the 8 cores available). A lot of compute budget is used for things phone cameras are rubbish at. At some point things like heat become a problem.
3. Data volumes are hard: Olympus are "only" dealing with a 20 MPix image. Sony are dealing with 24 - 60 MPix images. Olympus do that at up to 60 frames/s (20 with AF), and to read the data within the constraints of shutter speeds of 1/16000 s. That is... a lot of data compared to the relatively modest rates on an iPhone. Oh, and while iPhone users are generally OK with a bit of lag, DSLR users get really pissy if you're making them wait for that. Latency needs to be very low.
4. Physics is hard: A Sony sensor is a 24 x 35 mm hunk of silicon. Quite apart from the challenges of the data volume, reading a chunk of CMOS that large has been a challenge. Sony have done a lot of clever things to work around those limits, but still... (Olympus have been able to do high frame rates longer than anyone else in part because their sensors are smaller)