Phones are now sitting in that segment of casual photography. And are "affordable" and convenient.
Those of us who are nerdy about pictures, go and buy a mirrorless. But that's always going to be a small and different segment.
This may not last forever. Phones are becoming less "cool" to people. They might come around again to carrying multiple specialized devices.
Now only C will buy a dedicated camera. But in the late 0’s and the 2010’s, segment B did too—lots of people bought DSLRs to get better quality pictures — often sticking to the kit lens and not getting all geeky about photography… just putting everything on automatic would still offer much better quality than a compact camera or a phone camera.
As phone cameras got better, people in this market segment switched to phones — they might just care more about the type of camera on the phone than the most casual of users do.
Consequently camera sales have plummeted: https://www.statista.com/statistics/799526/shipments-of-digi...
The first company to really "get" the integration of point and shoot cameras into the mobile ecosystem properly will win big.
Fuji is already selling boatloads of X100Vs, and there's the Ricoh GR3, etc as well. There's a trend for ergonomic nice high end fixed lens cameras.
And for kicks go on eBay and look up the prices of used old Canon PowerShots. Have a nice condition pink one in a drawer you can make some coin. From worthless e-waste to $300 status symbol...