DSLR quality has been a buzzword for phone cameras for a while now. And in some cases it is. But when comparing photos across a range of conditions from my phone to a full frame DSLR with a good lens one is clearly better. As one example, simulated bokeh isn't as nice looking at the real thing. The resulting photo difference is more pronounced in long telephoto portraits.

The software, convenience, and always with you aspect ensure phones will probably always be dominant. But as Leica is showing there is still a hunger for photos that look better.

With photography, optimizing hardware (sensor, glass) is going to yield more results than optimizing software. Sensor size has an impact on the resulting photo.