It’s a couple of factors I would say. If just one company stops doing it, then customers will choose other companies’ phones as they can seem more modern (buying a 1.5yo phone vs a phone released 6 months ago, easy choice). Then you have the investors, imagine telling them you’re not gonna release a phone for another year, diminishing profits…
Honestly I think apple would be the only company that would avoid the first issue as it’s the only iOS provider, but still you have the investors and the CEO itself that also has a goal of making the most profits.
"Why the yearly cycle for flagship phones?" is a good question, given that the model seems to falter a bit:
- Apple iPhone 14 is a mere repainting of iPhone 13, with same chipset. iPhone 15 also seems to be a low iteration.
- Samsung S23(+) is just a chipset replacement of S22(+), plus little bells & whistles. Same for iPhone 15.
With S years, Apple more or less acknowledged a development cycle of 2/3 years. So far, they make most profit by issuing yearly phones, but this might be a defensive move:
a) if they wait for too long, they look outpaced, esp. since they're trailing in innovation (OLED, USB-C, Flip/Fold...).
b) Sadly, the only way to upgrade an iPhone is to buy a new one (same for Android flagships).
Nowadays, they're more "polishing edge" than "cutting edge", with ease of use, build quality, brand ecosystem increasing average revenue per user, etc. Would be happier with longer cycles though, this industry has gone a bit "waste while you can" imho.