The general rule of thumb with computers is that if you've owned one for more than a few years, it's likely obsolete and nearly any new model will vastly outperform it. Does the same hold true for point-and-shoot cameras?
I currently use a Canon PowerShot SD750, which still functions perfectly well. However, seeing as it is around 5 years old, I'm wondering if I should upgrade by default. Is virtually any newer point-and-shoot going to take superior pictures to my five year old model?
What's obsolete?
Does it do the job for you? Yes, then it isn't obsolete. No, it might be. My laptop is now around 4 years old - and still doing well. OK, I got a more powerful desktop this year but it is still a perfectly capable computer (even for photo editing if you ignore Adobe's performance issues).
The same works for nearly any other piece of technology. Most compact cameras up to as much as 6 years old are still very much capable cameras. There is an old PowerShot at home, from December 2005 - 5MP but otherwise it works perfectly fine and shoots perfect images (in good light).
Companies want you to think you constantly need something better, but the truth is that most of the "equipment" nowadays is overkill and 90% or more of the people do not need (!!) the equipment they have - be it a computer, phone, camera or car. Now "need" is the key word here - because you might want a new piece of equipment, but you might not need it.
I.e. to sum it up: If it does the job for you then it is fine and you do not need anything new.
You can't find an "yes" or "no" answer for your question!
By today standards, your camera is indeed obsolete not good enough, also many smart phones may have better cameras than your Canon, but truth is it all depends on your needs.
If you think you need a higher resolution, better ISO performance, better flash, better lens and generally higher image quality and more freedom, then you should upgrade, but that doesn't mean you can't use your P&S camera and make great pictures with it.
I use Nikon now, but I still have my 6 years old Canon P&S, it's still working perfectly and some times it's more useful than my heavy and expensive DSLR!
I would say it is dead now. Even back in 2012, it was near death with the advent of Smartphones.
I know the market still exists, but the old adage of "the best camera is the one you have with you" means that today, the Smartphone digital cameras are now the best for casual, point and shoot situations.
It's true that technology moves very fast. I don't think we can apply a general rule, though, because good optics will stay good and brand-new cheap optics will always be poor.
Particularly, resolution and high ISO performance will get better, as will the anything that depends on processing speed. Other things, like the lens and the control interface, just don't change, and you could easily buy a brand new camera that's worse in theses important areas.
Three or five years seems like a good rule of thumb, but overall, a camera isn't obsolete until it's not useful to you anymore. If you're still happy with what you have, you'll want to look for a camera of equivalent level. (I'd take a five-year-old Canon G9 over any sub-$200 P&S today, even though it is "clearly" obsoleted by the current field of more expensive enthusiast digicams.)
Obsolete is a funny word in this context. Its true that Moore's law is continuing its relentless march, making a 3 year old computer about 4 times "different" than a new one. And we can either have the same performance for a tiny fraction of the cost, or more realistically, the same price buys 3 to 4 times the performance.
I have something like 20 computers in my house. Many are servers providing web hosting on the Internet. Some of these computers are old, 4, 5, some even 8 years old. But they still work, so while they are economically obsolete, they are doing their jobs and are by no means "obsolete" functionally.
Inexpensive cameras, both P&S and entry-level DSLRs are little more than a box to hold a sensor, computer and a lens. Many P&S don't even have an optical viewfinder -- they use a view screen, the same screens sold in the hundreds of millions for cell phones. So the screens improve with Moore's laws, as to the sensors and CPUs. The box doesn't improve much, but who cares.
As @mattm said, its really your choice, is it obsolete for you. This is if you focus on your particular P&S. But as a larger issue, the concept of a P&S is essentially dead. People take photos with their smartphones. The old law that the best camera is the one you have with you holds. You have a smartphone in your pocket. To replace that with another camera, it has to be very special. So far, none of the pocket P&S are special.
There are two P&S with Android, and soon there will be more with full cell-phone data access. These have a chance to have better optics and larger sensors than will fit in a smartphone. But even if the product line stays alive, it will be an ever shrinking niche market.
My wife uses a Canon S95 P&S, and she loves it. She'll probably use it at least another 5 years.
So what does the word "obsolete" mean?
I would say about 5 years but I wouldn't say it's obsolete. In fact, I have an old digital camera by Canon (SD550), that outperforms my daughters newer Polaroid digital camera. If it's old and you like it, it's not obsolete.
