It's still cheaper to not buy a phone. Yes, buying with pre-tax dollars is cheaper than at a store. But not buying one at all is even cheaper.
And business expenses, like a new phone, are usually above the line, meaning you essentially get a discount of your marginal tax rate, you don't just get it for free.
I don't think they meant it like "I have to get the new one for tax reasons", but more like "I get the new one instead of my wife getting the new one, for tax reasons"
Yet if you'd buy normal phones, you'd not be spending a thousand bucks a year but rather something like 4× 300 bucks every 4 years or maybe 4× 500 every 5 years depending on what tier you get (assuming a standard family with 2 parents and 2 kids). Then nobody has hand-me-downs and everyone gets a fun new toy at the same time. You can even pick the model that fits each person's usage best! Some can have a bigger battery, others can have more storage...
Your total expenses are less than half and the average phone age is the same while being adapted to everyone's needs. Each device is about 90% as good as the thousand-buck ones (assuming no one has special requirements, like if you're really into photography then either a camera or a top-of-the-line phone does make sense! Exceptions exist for sure)
Or you tell yourself you can get a discount (omg!) by buying it for business and get yourself a shiny new toy every year :). I know some people that do this indeed
In a family group, at least one person in the hand-me-down chain is going to have a problem with their phone every year, so it makes sense for all the phones to scoot a step down regularly. And yeah, if the person first in line can claim them as a business expense then that’s a good excuse.
Yes of course it still costs money and not worth it if you derive zero benefit. But you pay less money, so you expect over many users there will be several for whom its worth upgrading at the lower price but not the higher price.
And business expenses, like a new phone, are usually above the line, meaning you essentially get a discount of your marginal tax rate, you don't just get it for free.