From Fortune.com: New iPhone no threat to the Flip camcorder

The iPhone can do almost everything the Flip can, and in some cases, even more. In spite of this, tech and camcorder industry analysts don't believe it's a threat. Ironically, they say that many consumers are attracted to the Flip precisely because it lacks the iPhone's panoply of functions and add-ons.
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Despite the seeming trend of convergence toward a single multipurpose device, analysts claim many consumers still prefer electronics dedicated to one task. "The notion of the hybrid cannibal device always pops up," says Chris Chute of research firm IDC. "The consumer doesn't say to themselves, 'I'm going to buy one device that does everything okay.'"

The iPhone is a stealth threat to all single function devices.  You might not buy the iPhone thinking it'll replace all these devices, but when you use it you realize that it's good enough for all these uses and you have it with you all the time.

I have a Canon PowerShot SD780IS that I really like because of its small size, but unless it's dark and I need a flash, I can get pictures that are pretty good with the iPhone camera.

And now that the iPhone has video and it's already in my pocket all the time, I have no need for a Flip camcorder.  So, how is the iPhone not a threat to the Flip?