Despite the harder competition, the zoom brand is still strong in low budget applications (I own an Olympus LS-5 that I've let some people borrow to use as a bit bucket on DSLR shoots, and they all seem to refer to it as a Zoom, as if it's a synonym for recorder). Despite the low quality, it's a pretty flexible unit and pretty good for hobby musicians and journalists.
I don't think it's going to be replaced for at least a few years.