In the general case (not only SQLite), it is best to do the calculation for all values (cities) at once, and the union to build the query:
SELECT ContactName, Phone, Customers.City as originalCity
FROM Customers
JOIN (SELECT city, count(*) cnt
FROM Customers
GROUP BY city) Customers_City_Count
ON Customers.city = Customers_City_Count.city
ORDER BY Customers_City_Count.cnt DESC, ContactName ASC
(to prevent, as in your case, counting from calculating many times for the same value (city))