Do iPhone photos look better when zoomed in? Of course not, but they do look better at "normal" scale, which is what counts IMO. And of course this only applies when you shoot "standard" scenes, the DSLR (with lenses) gives you ability to shoot things that the iPhone just can't.
Am I ditching my DSLR? Of course not, but that's only because I'm willing to invest effort in actually taking great photos, which isn't trivial (to me) and is much harder with the iPhone.
I suspect this is probably why you're seeing the sales numbers drop too. The big camera makers have been relying on the cheap units to bring in the money. They're transitioning now to relying on expensive, high end units instead. It's a much smaller addressable market though.
At some point I think it will be largely a professional thing. Eventually the computational photography will look good enough to make up for the space constraints of a phones' lens. But the downside will be that any photo taken with your phone will look kind of samey and be poor at getting fine detail. And having your own camera with manual control options will let people feel more in control of what they're doing.
Camera phones will try to re-sharpen the image, but some information is always lost. It's especially obvious looking at things with fine detail and sharp edges, like tree leaves against a bright sky.
I tend to buy last year's midgrade phone because I don't really need the latest and greatest. Maybe the top end really does take the full photos they claim, but that still leaves a lot of cell phones that are lying.
Most of the recent cell phones take perfectly adequate pictures, considering the amazing disadvantages they are laboring under. It's just that if you downsample the pictures to 2 or 4MP, you're basically losing no information.
(There are similar effects with video. The aforementioned 10+ year-old camera I had suffers from this as well. It has a "720P" and a "1080P" video mode, but based on my experimentation, both modes get real video out at about 400-500 "real" lines of vertical quality. I can squeeze either video's source down to that size and when I compare the full screen result to the original, I can find no difference whatsoever. I imagine more modern real cameras probably do a better job here; this thing is pretty old now, obviously.)
But almost any dedicated camera that isn't down in the complete crap price range will blow a cell phone out of the water, for two major reasons. First, optical zoom, the number one thing I miss with my cell phone. Second, it is at least somewhat more likely that your "12MP camera" really is 12 MP with your real camera, whereas it's fairly likely you "12MP" cell phone is a lie [1].
This is even in the $150/200 range, long before we get to the ability to change lenses or all those other pro features. My ~$200 camera from 10+ years ago still takes better pictures than my cell phone, because even though my cell phone nominally beats it on megapixels, my camera actually uses all of its pixels to obtain real information from the scene, instead of being a bullet-point feature on a device that isn't even primarily a camera.
So, to anyone reading this, if this sounds interesting, you don't even have to go to the big, expensive stuff; my kid literally bought a camera at a garage sale for $5 that also takes better pictures than my cell because it had like 8x optical zoom. It cost me more to find a functional battery than the camera itself did. It's not hard or expensive.
[1]: Test: Take a picture in broad daylight, the best possible lighting conditions. Move the picture to your computer. Zoom in until you can see all the pixels clearly. Can you see sharp edges, or do you see a whole bunch of multi-pixel blobs of the sameish color, even around sharp edges? If the latter, your "pixel count" is a lie; it doesn't actually have that much resolving power.