They're doing a woven material. The article I saw said the rumor was using recycled nylon and polyester in some manner, but that was a rumor and I don't know if it's confirmed. But you could absolutely make a decent, reasonably rugged phone case with something in approximately the neighborhood of canvas.
Stopping trying to be leather when it sucked was needed. If you're not doing a relatively high quality grade of leather, it can't handle the abuse, and what Apple had recently wasn't that.