I think if you're looking to invest in one useful thing, a good phone would be a great purchase. Maybe the Moto G at $200?
Amortized over a year, you're talking about a lot of bang for the buck.
The S3 generation of hardware has stood up very well.
My only reason to upgrade would be for some good security hardware that can support full disk encryption with no slowdown.
How do you expect that person with meager income to pay for the network bandwidth and usage bill?
>>Smartphones are really high-value!
This I agree wholeheartedly. At least for people like me, who enjoy reading books, smart-phones (with sites like project Gutenberg) provide such an utopia that I feel like living in heaven. Of course, I know that smart-phones don't solve all problems automatically, but from knowledge-seeker's PoV, smart-phones are of great value.
Also, I understand that not all people like to read, but that's a different thing to ponder upon.
For $400 you get a device that will let you watch movies, play games, check email, get phone calls, etc.
Granted you could also get a cheaper phone but this replaces your TV and computer! Smartphones are really high-value!