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Because the development of new Smartphone SOC has been very strong, and the new ones really are better in multiple ways. The gains are far from minimal. There are also huge improvements in display, camera and modem technology. For the processing power the improvements are especially big when you look at PPW figures.
Regarding cheap phones, you can get very feature rich very usable smartphones dirt cheap now, that are both way better and way cheaper than just a few years ago. It used to be that cheap phones lacked features like GPS and NFS, even motion sensors could be limited, and they certainly didn't have bluetooth. Now all that is generally included even in cheap phones, and they have good screens too, even a modest IPS screen which is dirt cheap can be pretty good nowadays. So the progress is for all.
My wife just bought a phone that was cheaper than her old phone, but still it's is way better.
The reason they all make better phones is due to this thing we call competition. If all brands except one stopped making better phones, the one that continues making them better will take marketshare from everybody else, and have by far the best profits, because the highest profits are with the best phones.
PS: Something that is also new in "standard" phones is that they have way better water protection. It used to be you would have to buy an ugly bulky phone to have that, now you can get standard phones with good IPS ratings, so you don't have to worry about using them in the rain.
Contrary to you, I find the continued development of better phones amazing. Latest phone I bought was twice what I thought I'd ever spend, and that was because I wanted a good camera. The new Cameras are so freaking great, that if you ever tried taking pictures with an old film camera, that needed the film developed at a shop to get them on paper.
What we have now is way beyond what I ever imagined possible, but really so is just about everything with a modern smartphone.
They really are marvels of technology that some people just take for granted.
But research the SOC, The Camera, GPS or the motion sensors, even a modest motion sensor utilize quantum theory technology, comparing the synchronization of 2 meeting light waves, and the feature cost less than a dollar to make!
This is what the future was supposed to be, unfortunately only smartphones have delivered beyond our dreams, everything else is turning to shit.
I disagree. New smartphones may have a few better specs, but are overall worse than older models.
For example, they are getting bigger and bigger and can't be operated one handed any more, even with Androids one-handed mode, because the zoom makes everything tiny.
Newer phones become hotter, batteries more likely to turn into spicy pillows.
More bloatware preinstalled, like AI stuff or "AR Emoji" etc.
The camera notches are growing too, even though most people would be fine with notchless cameras.
They are getting heavier and thicker too. In 2015 we had 5.1mm 98g phones. Not even a notch. It all went downhill from there.
And don't even get me started on the prices.
Well it's not ALL progress, personally I'd like the notification LED and the mini jack back.
But overall, I think modern smartphones are amazing.