A fair point. However I buy my phone SIM free for cash. I do not expect to keep this more than a year because like you said a built in battery isn't great. I will sell this phone/trade it in and buy whatever the new phone I want is. Doing it this way means I still get a good price for selling my phone to offset the cost of the new phone. Sure I spend about £200-250 on a phone each year but I am not tied into a contract for 24 months and I am on a great SIM only plan with unlimited 4G data for £15/month. When I calculate it over 24 months I save money over getting the same phone on a contract.
Being off contract, you save the most money by the fact that you aren't forced to continually upgrade your phone to get your subsidy. I'm on a ~$25 USD/month plan with unlimited talk/text + 2.5GB LTE, and I typically keep my phones ~3 years. Having said that, as you stated, even if I needed to have new phones every year, it'd still be cheaper than a contract :).
