The thing with phones is that they are also seen as a necessity product...
I.E. To make and receive phones calls and messages, to check emails and more for work.
Eventually your current device will fail or break from being dropped or something... And you might as well replace it with whatever the latest and greatest is.
I have the S23 Ultra and my partner just got the S24 Ultra, there is barely any difference between the two, might as well call the S24 Ultra an S23 Ultra Plus... But we replace our phones with the latest flagship when our current one breaks anyway, so they could call the latest phone "Pigs might fly" and we will still buy it if needed.

Consoles aren't like that, they are mostly just an entertainment device and not a requirement for work. - I could probably skip a whole console generation these days and not bat an eye as the Playstation 5/Xbox Series are very much the same experience as the previous generation, just faster.

It's only if there is a rare "must have" exclusive that there is any incentive to upgrade consoles... Even then they are released on PC these days.

To an extent but not completely. The phone market is a good example of what happens once an industry reaches a point where there's no point in upgrading or innovating further. They either do it anyways or try to convince people they do so they can keep on selling.

But the thing is... people also don't have any actual incentive to upgrade their phone when you stop and think about it. Even if your old one breaks (and most people don't wait that long), you're never gonna need the latest high end model, ever. Like you describe with consoles, it's the same just faster, except for phones it's been that way even longer. If you choose to buy a flagship anyway that's the same reason people will keep buying consoles.

Sega’s Saturn and Dreamcast were unique, the PlayStation and PS2 just happened to clone them and have more usable features, a better price, and better marketing and third party relations.

Nintendo tends to be at its best when it’s not trying to align with other console manufacturers (particularly Gamecube) - because they end up coming off like the kiddy/junior version of the original. NES, Gameboy, DS, Wii, and Switch all went against the current and discovered new oceans. Of course, once in a while they accidentally land in a smaller lake (N64), or travel up shit creek (Virtual Boy and Wii U).

Regardless, I buy every Nintendo console. But most Nintendo fans don’t, and will be fine skipping whole generations. Look at guys like Mike Matei who is still a fanatical NES/SNES guy.

That's right. You aren't upgrading. You are essentially just replacing through natural attrition.
But when you replace your device, you aren't buying a several year old phone... Because they aren't on the market anymore.

As for the high-end, you are partially correct there.
A large volume of Samsung/Apple high-end device sales are actually through bundled plans where the device is rolled into your 4G/5G LTE service contract.
This is why a device like the S23 Ultra managed to outsell the plain S23, the higher price just was irrelevant due to plans being pushed by telco's.
https://www.sammobile.com/news/galaxy-s23-sales-higher-galaxy-s22-report/

For those on lower incomes or those who don't have a good credit rating, prepaid/post paid devices tend to be the largest volume sellers... I.E Samsung Galaxy A54... But again, people don't replace them yearly, they replace them through natural attrition and will likely buy another device in that similar class or better.

Samsung rolls over 200~ million phones a year. Most of it's customers are just replacing devices.

Phones are an essential commodity item... And being a handheld device are prone to being dropped, lost or broken through regular usage, where consoles can last decades.

I mean I can see your argument but I do think you're giving people too much credit for being "practical" in their phone buying habits when the reality is pretty far from that. Practical would be buying a Motorola up front for like ~100€ which is what I did. Wasn't even an outdated model, works fine, I have no complaints.

VR is the true unexplored horizon, standard screen gaming (regardless of the size of the screen) kinda just is what it is, the leaps forward will be more incremental from this point on. 

You can only reinvent the wheel so often when we've already hit the point of being able to render anything at a reasonable high level of visual fidelity for standard consoles (I'll include even the Switch in that grouping).  

PS5/XSX versus PS4/XB1 is the most lame duck "generational leap" in the history of video games and it's probably not going to get much better.

For the next generation AI will need to do a lot of heavy lifting or it'll be even worse since unlike the PS4 and Xbox One the CPU in the PS5 and Xbox Series aren't pathetic and they both have SSDs so the storage situation has already gotten good. I'm sure Sony will push PSSR 2.0 hard since it'll probably come with frame generation which will let a lot more games have 60fps and even 120fps modes on the PS6 but that by itself wouldn't constitute a big generational leap. How big it is will largely come down to just how much AI advances in the next four years.