I'm sure there are multiple factors that go into it.
Location, for example. I live in Colorado...big landscape state. I think people also generally look to DSLRs to give them better landscape photos than their phones. Once mirrorless quality kicks up, I suspect most will go for the smaller, more portable and easier to use mirrorless options instead of DSLRs. We also have plenty of wildlife here, and two large migration seasons for birds. I see a LOT of average people at the local state parks photographing birds and wildlife with DSLRs and moderately long telephoto lenses.
I imagine things could be different in big cities. People always on the move, the inconvenience of draping a large, heavy camera over your neck in thick crowds, etc. I imagine smaller cameras are probably more desirable there. I don't know for sure...don't like cities much myself, I avoid them. I live in Colorado, and I've barely been to downtown Denver. When I go, it's in for work, out as soon as I can be. But it definitely seems like a very different environment, and I can't say I see many people walking around with big cameras.
Still, I see the ILC market as a whole as a big market that still has growth potential. I think economies are still contracting somewhat, and still trying to settle from the recessions. I think there have been BIG demographic shifts among large population groups who have shifted from high paying jobs to low paying jobs, no jobs, or retirement. That changes sales trends. Once that whole shakeout is done, and new generations start moving into the market, I think ILC sales will pick up. It's possible new generations would prefer different kinds of cameras as well...mirrorless over DSLR, highly connected (i.e. WiFi or even LTE web access for direct publishing of photos to online profiles like instagram), etc. New markets as well, with asian and indian markets growing considerably.
Yeah, that last point about connectivity is a good one and something smartphones do exceptionally well. A lot of times I find myself grabbing my iPhone and snapping a pic of a product I want to sell (like on a used items forum) or a document (such as an ID card for work) I want to quickly email as it eliminates that extra step of transferring it to a computer. Combine that ability with something like a G7 X and hell yeah I'll take some of that! Getting your media to the masses as soon as things happen seems to be the trend nowadays rather than three weeks later when no one really cares.
Lee Jay I can't imagine having a cellphone for 7 years! so curious, what kind is it??