Cell phones are inherently limited to what can be shoved inside a pocket. Even with fancy folded optics, that's going to limit what they can do. Still, it's safe to predict that the cheapest digital cameras, bought by people who aren't looking for the best optics and other features, are very much in the gunsights of the cell-phone vendors.

Interesting question: when will Canon, Nikon, and so forth put their name on a cell phone? What would a Leica-branded cell phone be (aside from a rebranded Panasonic product, of course)?

Somewhere, there's a joke picture to be taken with somebody holding a big telephoto lens up to their ear...