Like many of the stalwart manufacturers, Nikon has a long history with integrated cameras that dates back to the birth of digital. Compact and bridge cameras came long before DSLRs and many of the design standards we take for granted today originated during this period of development. Integrated cameras were introduced for the simple reason that they were… well, simple. This reduced costs for what were relatively expensive products at the time. The first fully integrated digital camera — the Fuji DS-1P — cost an extraordinary $20,000 which got you a 0.4-megapixel image and 2-megabyte memory card. Hardly exotic by today’s standards but was unique in offering instant photography, digital transfer, and computer-based manipulation via the burgeoning Photoshop market… More here.
I can think of few industries as badly hit by the smartphone as the camera sector. The article above helps to add some more detail to the phenomenon.