One of the best features of iPhone 4 is that it records video in 720p. As with the iPhone 3GS, a lot of people have been asking whether that functionality will kill the Flip. I think the answer is still no, but it will eventually turn into a yes.

The problem is that the iPhone still isn’t prevalent enough. There are plenty of people in the world who are scared of smartphones – unsure that the additional cost of a data plan is actually worth it. For those people, the Flip is still a great option. It’s cheap, easy to use, and records great video.

As smartphones become more and more prevalent, though, its inevitable that the Flip will die off. As I’ve said plenty of times about the Kindle, I still believe purpose-built devices are a thing of the past. The Flip is no exception. The more advanced our daily handhelds become, the less we’ll need things like a Flip to fill the gap.

Just a few days before the iPhone 3GS hits consumers, Pure Digital Technologies, who makes the Flip series of digital camcorders has updated their software for improved sharing support. The Flip has been the camcorder of choice for many, especially for YouTube enthusiasts.

The new Flip software adds the ability for users to create channels with individual security settings, allowing them to share their videos privately, instead of relying on YouTube and other social networking sites to do so. Private sharing does not support HD playback, but for many that’s not the draw of the Flip. It’s ease of use they’re after.

Pure Digital has also announced an app for the iPhone that will allow iPhone owners to view the privately shared videos right on the phone. It’s an interesting move from Pure Digital, particularly with the video recording and editing features available on the new iPhone. Add to that the App Store approval process, which the Flip app will have to pass before making it to consumers, and it sounds like Pure Digital is pretty worried about their market share.

Their concern is probably reasonable, though the Flip line still offers enough benefits to keep them in people’s hands. For now, at least.