Then they do what they always do and pass the bill to the consumer. Its 2021, what are you not going to buy a computer and cell phone? Technology like this is a utility now.
I think most phone purchases might not be people purchasing a phone because they need one, but people purchasing a newer phone because it's cool. And while people certainly pour crazy amount of money in those gadgets, I'm sure there is a price limit when they are not buying a new one.
Ask any of your peers why they upgrade phones. 9/10 will tell you their old one was too old and slow to run modern software or the battery was toast, and that happens in just a few years for some phones. My roomate will probably be upgrading their iphone X soon, not because they want a new iphone, but because its starting to do weird things like not be able to take screenshots and is overall far slower than when he first got the device. Same story with the 6s the X replaced years ago. New phones haven't been cool for a long time, we've been buying the exact same slab of glass for like a decade.