Past Peak demand?
Couldn't possibly also be to do with the fact that most people who want a smartphone already have them, and for many there is no great incentive to upgrade as the previous models already had sufficient features and specifications for the form factor.
More cores/faster processors may look good on paper, but in practice what is more important in a mobile device is battery life.
Cameras have reached the limit of resolution that makes sense due to the limitations of the compact lenses (yes I know you could use all that excess processor power to compensate in software for the limitations of the lens if it is well characterised, but wouldn't you do better just to have a proper lens on a real camera).
Most users want something that fits easily in their pocket and are only using them to browse the web, check emails and play the odd game, for which they are fine.
Personally I'm still using an S2, and the only reason I am considering replacing it is because the usb port is a bit loose so the charger keeps poping out if you aren't careful, otherwise I would just buy a new battery and probably keep it for another 3 years.