This really depends on which smartphone. Smartphone display readability in direct sunlight is certainly not a given. At least half the Android phones out there are marginal at best (and many are completely unreadable in direct sunlight). Of those with displays that perform well outdoors, many have to run the backlight at such high levels that battery life is severely impacted. And battery life is the other "gotcha". Running the display (with high brightness), the radios, the GPS receiver, and the cycling software continuously is a significant power load. Relatively few Android phones can handle this for more than three hours, and many would be "on fumes" in under two.

So if you never see the sun and/or your rides never exceed three hours (and you don't mind finishing with a near dead phone battery), your chance of success using the average smartphone as a bike computer is ok. Otherwise, you need to carefully evaluate your phone's capabilities before considering this option. There are a handful of smartphones that actually excel at this -- notably the Sony Xperia Z series and some of the Samsung models -- but they're rarely the ones the carriers push with big contract subsidies. I have no experience with iPhones, so I can't comment on their suitability.

Many people will find that a basic bike computer for real-time speed and distance coupled with a smartphone running a GPS tracker in your jersey pocket with the screen off is an extremely effective solution (especially if you pick software that supports stored map files so you can put the radios in airplane mode). If disposable income is a consideration, I would only suggest moving to a Garmin-type solution (or a bike-mounted optimized smartphone) if you need to add heart rate and/or power meter data for structured training purposes.