5 years on a battery is pretty tough on the device, though.
True, but we live in an age of cheap battery packs and around the corner stores that will do iPhone screen repair/battery replacement for a reasonable cost. iPhone batteries aren't easily replaceable, but it can be done.
But when you have the economic factor not being much different between upgrading ever year and every 3, why not just go for every year?
Because the only reason that math works out is the article assumes that the phone is sold when it is replaced. We know that many people don't want to/don't know how to/don't know they can sell their phones to other people, or otherwise all the trade-in upgrade deals wouldn't be so popular. I think for many on this forum that is a great solution, but for the common person who thinks an iPhone COSTS $200 and then still thinks that is a lot of money flipping phones and paying unlocked prices isn't even on the map.
I see a LOT of people with older iPhones all over. I see many spouses or kids with hand-me-down iPhones, or people who obviously just bought what was the $49 iPhone at the AT&T store without any clue they invested in a two year old device the month before it stopped being sold. We also see this when Apple has put out new iOS versions and less sophisticated iPhone owners (aka the people who still have aol.com emails) have sworn the whole point of the upgrade was to make their old phone run slower so they have to upgrade to new phones.
Apple isn't playing just with the cutting edge creatives anymore like in 2005. In 2015 the iPhone is the major computing device for a generation of people who couldn't get enough "I can't program the VCR" jokes back in the 80s. This crowd was used to replacing their computer every five years, and so they expect to get the same life out of an iPad or an iPhone. Pushing them to phone flipping as an economic "solution" would probably just lead to them being scammed en mass.
Plus quite frankly these users don't need more. The iPhone 5 had all the functionality they needed, and the iPhone 6+ finally has the screen size they want. It takes that iPhone 6+ having less effective RAM than the iPhone 5 to push these consumers into that iPhone 7s or 8 purchase they really don't want to make because all their apps at that point (which will expect 2GB) will be running slow.