There's a more important constraint here: people change out their small consumer electronics MUCH faster. They buy new phones every year or two, arguably as fast as Apple puts them out. Same was largely true for iPods. They don't replace their TVs very often.
How many Walkman's or Discman's did you buy before the iPod came out? The market for portable music devices went up exponentially from the 90's to the mid-2000's when the iPod achieved mainstream status. I bought two iPods in three years before the iPhone made 'em useless.
Off topic, but the iPhone has done anything but make my iPod Classic useless. It's shown me what a brilliant and useful device my Classic is, that I can hold 120gigs of music in my pocket at all times. You have to be a music fan to really appreciate this, but for me I like that I have a smart phone and an iPod and, if my classic broke, I would certainly buy another one.
