Lower volume, higher unit price. Also cameras and lenses are (generally) much much better than they used to be. Perhaps people are willing to pay more for a better thing.
They really are. The cheap-o kit lenses they include nowadays use molded aspheric elements, and they are designed in such a way to take advantage of in-camera distortion and vignette correction. They are far better than the kit zooms you’d get back in the film days.
I bought a body only Canon M50 as a glovebox camera, and read the reviews of their 15-45 EF-M kit lens and thought that it couldn't be that bad. I bought a new one on Ebay for $50. It is horrible in every single aspect. I've had numerous 35MM kit lenses over the years, and the Canon leads the pack for pure trash factor. It essentially turns the camera into a toy camera.
The higher end kits from different manufacturers are ok, but those are regular lenses vs designed to be in a kit at the lowest possible price.
Canon and Nikon are going to be in real trouble unless they increase the quality of their cheaper wares and make software that works.
The products are better because of steady improvement in precision manufacturing. Sensors and lenses have both come a long way, the latter is mostly a benefit of cheaper precision steppers.
The prices are higher because phones have taken the whole entry tier of the market out, pretty much. There's not a lot of point in a good digital camera with one noninterchangeable zoom lens, when pictures from a phone camera are almost as high quality, and action cameras like the GoPro also chipped away at that product.
Cameras are a specialty product now, with APS-C and 3/4 as the entry level. People who want that kind of control and quality are willing to pay for it, and there aren't as many of us as there used to be.
Your phone camera is way better at the job to be done, which is to quickly share pics of your cock, cats, or kids, depending on what age bracket you are in. Traditional cameras, in which I include mirrorless, are still terrrrible when it comes to quickly bouncing a photo to Instagram, and arguably even worse when it comes to quickly making a video for TikTok.
In particular the software assistance for capturing dynamic range and shooting in odd lighting conditions on an iPhone is pretty spectacular. Replicating the point and shoot experience requires a pretty substantial amount of skill on a traditional DSLR.
I think this depends on the shot. The Pixel 4 easily beats “cheap DSLR” in several settings, particularly low light. I know folks who have an iPhone as a phone and a Pixel as a camera :).
It’s true that it’s also much better at “photo production” (capture => minor edit => post), but I think you can find examples where the photo itself is strictly better.
A kit zoom lens will struggle in low light, but you can get extremely high quality fast primes for a couple of hundred dollars these days that will blow away any smartphone.
Apple's low light performance in their new phones is excellent, and they are making huge strides in every area with every generation. A minimum acceptable DLSR with an acceptable fast prime will cost $1k, which is also the cost of Apple's excellent pro iphone that will rival the quality of the former for the average user.
The Olympus 25mm f/1.8 is absolutely fantastic, and smaller. As are all the Olympus fast primes. You can get it for $250.
More expensive fast primes are worth the price for me. But the entry-level ones are optically pretty great these days.
[1] https://old.reddit.com/r/GooglePixel/comments/9rb53o/weekly_...