According to Fortune, the built-in video functionality of the iPhone won’t kill the Flip. While they’re certainly right in the short run, I don’t think it’ll take all that long for the Flip and its ilk to die.
I have the Flip HD and have now had the iPhone 3GS for a couple of days, and the main saving grace the Flip has is that it shoots in HD and the iPhone doesn’t (yet). But the old adage that “the best camera is the one you have with you” applies here. Now that the iPhone can shoot video, I’m less likely to take the Flip with me anywhere. Yes, I still keep it in the living room to shoot a video of the baby when she does something cute, but when we leave the house, I’d rather not have to remember something else.
As the article points out, the iPhone already surpasses the Flip in functionality, other than the aforementioned HD quality. Users might like that simplicity (although I’d argue that the additional functionality is out-of-the-way in the iPhone’s interface), but I think that the “camcorder industry analysts” who believe that simplicity is what Flip users really like are underestimating the power of one less thing to carry.