In 1970 I started my EE training. Comp. Sci. Sci. 101 with one my greatest teachers. Dr. Voelcker began the course with the following statement: “If I was asked to build a radio receiver, my knowledge of signals and circuitry would allow me to construct a circuit that demodulates those signals and feeds the output to an amp. Computers will soon be fast enough that they can solve demodulation equations in real-time. This means you can connect an antenna to an A/D Converter and an amplifier to D/A converter to accomplish the same thing.
It turned out that it was only a matter of time before we were able to call it a day. Ted Hoff, one the inventors and creators of the microprocessor was working on digital signal processing chips when I arrived at Intel in 1975. We built the first microprocessor that had an on-board A/D convertor in 1978.
It can be difficult to determine the exact boundary between analog and digital in some systems. Digital is when a circuit is turned on and off quickly. If you run the output through a capacitor, however, it will become analogue. This is how dimmers work.
The answer is: It all depends on system design requirements and cost. Digital is increasingly gaining the edge over analog. However, every digital circuit is analog and contains a lot more analog circuitry surrounding it that supplies power and drives lights and motors.