Does the iPhone 3G S replace the need for Flip?

Many industry critics are theorizing that the iPhone 3G S will eliminate the market for mini-camcorders, most notably Flip. TechCrunch's Michael Arrington says that Pure Digital (maker of the Flip) is facing "a new type of threat that they can't defeat," and that the "video capable iPhone, and video mobile phones in general, will make them irrelevant in the next couple of years." Pretty sad for a company that has been on a roll, especially with the recent release of the Flip UltraHD.

The iPhone has been hailed for being convenient in having so many functions in one device. The technology and quality of video isn't all there yet, but Kit Eaton at Fast Company says that HD capability is there, which would eventually make the iPhone a direct competitor of the Flip. This would save consumers money and hassle of carrying one more gadget around.

Is Flip's time up? Or is the iPhone hype just getting out of hand?