That kind of market calculus made sense before the recession. Now the value proposition has changed, and while people may still buy newer hardware (such as tablets) they expect better value from their tech purchasing because increasing wealth is no longer a given. Also, people are more suspicious of corporations in general, especially ones that are sitting on a large cash pile. Public sentiment is fickle and can quickly bite a company in the ass - look at how far the stars of Groupon and Netflix have fallen in just two quarters.
The idea that everyone should replace their smartphone every two years says either that your firm is not interested in supplying the less well-off, or else that it doesn't much care whether its products end up in landfill or not. Sure, Apple locks down its hardware platform so tightly that maintaining backwards compatibility is far easier than it is for Google, but note how Apple products maintain a high resale value and that allows them to sell new ones at a premium price point without hurting demand. Apple may be hard to deal with for developers, but Apple consumers feel the firm treats them like Kings or Queens. Google overlooks this market positioning strategy at its peril; loyalty is a two-way street, and the firm should know this very well given its historical disruption of the Yahoo/Altavista/Lycos triumvirate that dominated search back in ~1998.