I have, perhaps a slightly different take on things.
In short, yes they are both in the wrong for their actions, but I think, above anything, it was probably caused by grief, and improper processing of said grief.
Lets start with the daughter. 14 years old, youngest of 4, and owns a £700 phone. Thinks its okay to play games during a funeral, and that getting her phone smashed is an acceptable reason to kick someone.
Well it sounds like, and I'm pretty sure OP has agreed somewhere in this thread, that the daughter is spoilt and not used to discipline. Which is half the problem here. She has grown up believing that she will get her way no matter what. And by the sounds of the things mentioned, it seems as though your wife is well aware of this, and is was trying to change this, but you (too busy trying to be friends with your daughter) kept indulging her regardless.
So spoilt 14 year old, not used to discipline, is it really any wonder why she didn't put the phone down when asked? No not really.
The violence aspect, while not remotely acceptable, kind of understandable from a 14 year olds point of view. At that age, a phone like that, would be one of her priced possessions. Imagine if someone took a baseball bat to every single one of your cars windows right in front of you, for example. I'm pretty sure you'd want to punch the person who did that! She has been raised without displine, and so not really been taught about consequences of actions, that was probably her first experience of it, and in her anger of having her priced possession smashed in front of her, she lashed out.
As for the gaming at the funeral itself. I wonder whether that is less an act of doing what she wants, and more her way of dealing with the grief of her grandmothers death. It can affect kids more than you might think. Was she told before hand that it's okay to cry about it, it's okay to show emotion? Maybe she thought the best way to handle herself was distraction during the funeral so she didn't end up crying and embarrass herself doing so in front of everyone. Did anyone sit her down before hand and tell her about proper ettique at a funeral? If she has never experienced anything like this before, you cannot just expect her to know what is right and wrong to do, what may help her deal with the situation may in fact come across as disrespectful.
In my opinion the daughter seems very confused, and the whole situation is overwhelming. Now not only has she lost her grandmother, whose loss she seems to be having trouble processing, but she now also lost her priced possession (and best distraction method for her grief), and now probably thinks her mother hates her and is scared at when she will next lash out at her.
Now to the mother. She has just lost her own mum, is completely full of not just grief, but stress at probably having to organise the funeral (which is very stressful), is dealing with a daughter who doesn't listen, and a husband who doesn't listen either and just encourages the daughters entitlement. On the one day she wanted thinks to go well, and wanted to give her parent a good send off, and allow herself to properly grief, probably the first time since finding out they passed (which is normally the way), she sees her daughter appearing to not care in the slightest, and her husband not caring enough to put a stop to it.
Right in the middle of her properly grieving, she asks her daughter to stop, and doesn't get listened to. This is the last thing she needs, more stress, "is it too much to ask for for just my daughter to listen on one day", and in that moment her grief turns into anger and she lashes out.
Then to find out that her husband cares more about the daughter who was being so disrespectful than his own wife.
By this point she probably feels that the whole day, the chance to say goodbye to her mum, was ruined by the incident with her daughter, and all she's hearing is you telling her that she is in the wrong, and the daughter needs a new phone.
Yes she broke a promise to you, and no she should not have gotten violent, but grief is a horrible thing, and a if timed right can bring out some awful other emotions.
I think you need to completely change what you are doing. For the meantime don't try and reconcile them, that will come in time, instead focus on helping them both, individually, with their grief. Give your wife a hell of a lot more care and attention than you seem to be doing at the moment, and stop talking about the incident and the follow up. Talk to your daughter, not about the phone or the incident, but about what she is feeling, about her grief and the loss of her grandmother.
When tensions have died down a little bit, and everyone is much calmer, try and have a rational conversation all together. With no shouting, or arguing, and none of you inserting your opinion. Get a talking stick if need be, allow each perosn to rationally say their piece. Start with (daughter) why did you feel you had to game at the funeral? (mother) how did it make you feel seeing daughter gaming during her grandmothers funeral? (daughter) Why did you not put it down when asked? (both) Why did you feel that violence was an appropriate response? Like a literal mediation session. It won't solve things overnight but it will allow them to see things from each others perspectives.
Get them to talk about the process of grief together, to reminence about grandma together. And if trust is a problem between them both following the violence, then get them to discuss together the best way to go about rebuilding that.
Eventually everyone will be much calmer and then you can start talking both about the punishment, and in my opinion, future expectations from the daughterin relation to doing as she is told.
They are both in the wrong. And so are you.