But I think a more realistic scenario is that smartphones' functions aren't entirely hijacked by such peripherals as Google Glass or smartphones. Instead, the smartphones' capabilities will be diminished to, say, LTE modem.
Why I say that? It's because it's still hard for me to imagine that so many people who already have smartphones today will trade their phones with Google Glass!
In addition to what you mentioned, the core of the smart phone may be changing quite radically too. Or, at least Google might think it will. Combine a 2nd or 3rd generation Google Glass type device with a 2nd or 3rd generation smart watch and the need for a phone, as we know it today, simply goes away.
A few years ago, I could see desktop and laptop computers being replaced by wireless display and keyboard in combination with a smart phone. Today, I can see the phone component of that picture being replaced by something in a completely different form factor.
Smartphones will continue to exist. But most of the value is in their modem functions. They allow other device to get connected to the outside world. In that context, I see the battle for innovation competition unfolding not in smartphones, but "things" that are connected to smartphones.