My almost three year old Droid phone still works great and it was not so easy getting a new phone. What convinced me to upgrade was the Samsung Galaxy S III’s screen resolution of 1280 x 720 pixels. Sure upgrading from Android 2.x to 4.x is nice, but having a high density screen makes reading email, browsing the web, reading using the Kindle app, etc. all feel very natural, even on such a small device as a cellphone.
Also: the Netflix app is fantastic: unbelievably easy to watch video at this screen resolution, even on a tiny device. I have been an enthusiastic iPad owner, but I think that the Samsung Galaxy S III will replace using the iPad about half the time. I had thought about getting a Nexus 7 tablet for occasions then the iPad was bigger (and heavier!!) than what I needed it for. At least for now, a larger cell phone with a high density screen seems to fill that niche better.
One thing that surprised me after using my old phone for almost three years: I didn’t manually transfer any files from my old phone to my new phone. My old Droid automatically uploaded all the pictures I took to G+ and they were available almost instantly on my new phone. Same for my contacts, and I just about run my business on GMail and Google Calendar and those assets were immediately available – a no hassle upgrade.