One of the odd things about smartphones is that they are generally not very good are the audio. This is partly a handset design problem, and partly a network design problem. But every smartphone has a microphone, and its very common that those microphones do stop working – sometimes because water damages them, sometimes after phone fell down.
The microphones are tiny and you might well have a problem locating them. Some smartphones have more than one built-in microphones.
The principal microphone can be found ate the lower part of the smartphone, close to the dock connector. The second microphone can be found close to the headphone jack. The digitizer flex cable appears to be tightly in. A repair kit for the particular make and model damaged can be a helpful option for anyone skilled and confident enough to accept the repairs.