I would disagree that the iPhones in your school represent a keeping up with the Joneses. Smartphones are swiss army knives that provide a ton of benefit to folks without the resources to buy lots of different devices. Through the myriad of purchasing schemes available, the real cost difference between an iPhone/Galaxy and a cheap android device amounts to a couple of bucks a month.

When I was a kid in the 90s, kids, even kids without lots of money, wasted lots of the money they have access to on music. That money spent on tapes and CDs is similar to a data plan. Except the data plan + wifi gives you access to a world of services from phone, texting, music, tv, etc.

Personally, I think if I had very little in the way of resources, I would choose a smartphone investment over a TV, radio, and many other things. Its a high return product.