Count me in for not upgrading because the prices are insane. The good news is the iPhone 4 I'm still on has lasted for a long time with no significant wear other than the home button starting to weaken. And it should be possible to open it up and replace that part... Just a matter of unscrewing it, not so easy on the newer phones. So besides some incompatible apps, it's still solid as a music player, for web stuff, and for usual phone basics. Some people need more out of their phones, but I'm happy with my music.
There are enough people in the world, on different upgrade cycles (some upgrade this year, others next year, yet others already did last year, etc) that I don't think the manufacturers have to worry about itWhat will manufacturers come up with to keep people upgrading every year or two?