I haven't upgraded iPhones until a major number increment. When I upgraded both my and my spouse's iPhone 3 to 4, I sold each iPhone 3 on eBay for $10 less than the initial cost of the 4 with a 2-year ATT contract renewal. Same thing for 4 --> 5: at the ATT store this time, got about $15 less than the new contract plus two free iPhone 5 cases and a free power cord to use in the car with my existing USB charger, plus a waiver of the early renewal fee (it was a month before the 2-yr would have expired). All this on the first day the 5 was offered at ATT, waited in line for it and so-on.

I don't have a problem with continuing to sign up in 2-yr increments and I don't have an overriding need for the latest, i.e. I doubt I'll upgrade to the 5s or whatever they end up calling it. In fact, due to poor eyesight (or is it just normal and the iPhone screen is too small??) I plan to get a 7-in tablet soon and start using it for email, surfing, messaging, and yes, movies on the plane too -- yay! Then I think that many of the "smart" phone features of the iPhone may become redundant, so who knows, at the end of the current 2-yr contract I may downgrade my phone.