I sincerely hope that camera manufacturers don't give up on compact cameras altogether. I pretty much stopped using my Canon 5D a couple of years ago because as an amateur/enthusiast I got fed up of carrying bulky camera and lenses plus other drawbacks and didn't need really high image quality. So I started shooting with my phone camera because it suited my type of photography but found myself sometimes getting frustrated with certain things (eg. optical zoom range and controls) so contemplated getting a compact camera but thought long and hard about whether it would be worth it considering my phone had quite a high spec. camera (Huawei P30 Pro). In the end I went ahead and bought a Sony RX100vii and did not regret it because as well as the improved image quality, the range of controls and usability make it a significantly better tool for me.
For many people, a modern phone camera is as good as a dedicated camera but really you are just exchanging one set of tools for a different set of tools. The phone is better at some things and the camera is better at others but I still think there is a market at least for high end compact cameras, even if less so the cheap and cheerful point and shoots...although maybe the fact that you can get a "cheap" and cheerful camera is a good thing in itself because good phone cameras are often quite expensive.