A phone's over-rated for a kid living at home anyways. I didn't get one till I was eighteen, and it was pay-and-talk, no games or music. Just simple txt's that cost ten cents and very small number of minutes for local calls only. The only phone anyone needs so young is an emergency phone if you get lost or something.
I'd definitely go the mp3 player/discman route (though I didn't have either of those until highschool either). You can always re-download songs. You'd have to if the phone got broke or shorted out completely any ways.
I understand the frustration of loving something and having it taken away. But there's always more to the story than what you experience - and it'll be that way for life. Talking about things calmly with a positive attitude towards a solution or compromise works far better than staying angry over it.
Lol, my parents took away my books, and then they took away my door. Certainly my family is the definition of disfunctional, but I quickly found that accepting their decisions on some things (things I knew I had acted poorly about) and talking to them helped more often than not. Otherwise I found something else to entertain myself with, like friends or going outside.
It's really not the end of the world. In fact, there's a whole world out there to get interested in. Think big, and beyond day to day stuff. There's no reason to be sad when being sad's simply wasting your time and energy.