I do believe that the best camera is the one that is always with you.
More than a decade ago, it was my Lomo LC-A because it is compact enough for me to bring it with me to most places. Today (in 2014) it is the Xperia Z1. I am so glad that we now have smartphones which are equipped with high-resolution sensors. The Xperia Z1 camera sensor packs 20.7 megapixels in 1/2.3-inch area. This sensor is among the largest in the smartphones’ market and should promise low noise (but not really…) and better bokeh. The phone also has a dedicated shutter button with half-press ability — something I like very much.
The default operation mode is Superior Auto which means the user just needs to compose and trigger. The Manual mode on the other hand offers a little more flexibility to the user for EV compensation and setting of WB. It does not provide control/access to the shutter speeds and lens aperture (aperture seems to be fixed at f/2 in all the EXIF data I have checked for both Auto and Manual modes). Instead, there is a Scene selection. Also, full resolution 5248 x 3936 (20.7MP, 4:3) is only available in the Manual mode.
Although I prefer having some manual controls in my cameras, I seldom use the Manual mode. I stick to Auto most of the time because:
Noise at full resolution or 20.7MP is more pronounced
Smaller file obviously, with Superior Auto which locks max resolution at 8MP
16:9 in Superior Auto crops out the soft corners reported
The phone doesn’t remember the mode which I last used! Each time I start the camera app, it goes to Superior Auto!
Besides these two modes, the camera app also accepts add-ons developed by Sony and third parties (e.g. Evernote). I rarely use any of them except for Timeshift burst. They’re downloadable from the Play store.
Below are sample photos, directly from the camera (unedited) but resized, shot in either Superior Auto or Manual and all handheld. You can probably tell which mode is used from the aspect ratio. Resized images often reduce the effect of noise (one conclusion – most phones are fine if you use the photos for web). The lens according to the EXIF data, has 4.9mm focal length. I read this is equivalent to 27mm (FF/35mm).
To conclude, the camera produces sufficiently good images. With some post processing (noise reduction, sharpening, adjustments of shadows & highlights), the resized images should look great for web (or facebook, etc).
While the camera in your smartphone is not going to replace “real” cameras anytime soon — it should still be your best because you have it with you all the time — unless if you have dSLR with you all the time too.