We have older kids and are comfortable but don’t waste money.
My DD complained that all her friends got a Blackberry for Y7 Xmas (and made her aware of it), she had a phone but not the same. Within a year or so, a BlackBerry was out of fashion.
My response was people will always have more and less than you, different items, etc, don’t compare. These were her primary friends and I knew one at least didn’t come from a well-off family. Mine eventually got iPhones but not until 16+.
They are now young adults and working. They buy their own iPhones with Xmas/birthday money and wages but don’t upgrade regularly. Like you, we buy phones and have SIM only deals. My battery is shot so I might upgrade at Christmas, but may just pay for a new battery!
Both have cars we initially contributed to, both could afford newer ones, but they are happy with what they have.
DD best friend has changed hers at least 3 times in the 3.5yrs that DD has had one, always on credit, same with latest phone, then complains she can’t save up! DD can’t understand her - So we have definitely done something right!
Maybe buy her the towel but say she can have top of range phone when she earns the money for it. Keep impressing on her that having top material items doesn’t mean they can afford it. It will sink in eventually.