Most of my friends and coworkers upgrade their phones every other year. Some of them even upgrade to the previous year's model to save $100 or so. My one coworker recently specifically chose a Galaxy S3 instead of the Galaxy S4, her reasoning being "It's practically the same phone and I'm never going to use any of that new ****. I even turn 4G off." To each his/her own.
I only know of one person who upgrades every year. He always sells his current iPhone and iPad and gets the newer ones. I just don't see that as worth it. Every other year works really well for me so I'm probably on the S upgrade for the rest of my days. Besides lacking 4G, the main issue with my 4S is that the battery life isn't great anymore. I think Apple charges $100 to replace the battery. After a trade in and a new 2-year contract, I'm not spending that much more than that. Some programs have been crashing inexplicably every so often as well. The upgrade makes sense to me. As long as it lasts around two years, I'm comfortable with that.
Nothing Apple said during the announcement really mattered to me as a consumer. I already made up my mind to buy whatever Apple was releasing as I'm due for an upgrade. The improved camera simply means I'll be able to take higher quality pictures of my cats. I'm not really sure what a 64-bit processor means for my smartphone usage. I'm probably smartphoning wrong. I've heard some raging over the fingerprint reader even though the 5S isn't even the first phone to include one. And really, if you're worried that the NSA or law enforcement is going to track you or whatever, consider not committing crimes. I'm probably going to stick with a regular passcode (if I can) anyway.
I'm not sold on the new leather case for the 5S. I just wanted a bumper even though $30 was pretty outrageous. My 4S bumper is starting to wear down now, but it worked really well. I've dropped my phone so many times at the gym.