I do the same (as Littleshop mentioned), though I'll probably have to skip this generation, as my contract renewal won't be for another year.  But I always sell my old iPhone, buy the latest one, and it about evens out.  Sometimes I have to add $25 or so.  I never buy a phone without the contract renewal discount, and it baffles me that people will pay $700-$800 for a phone instead of waiting until their contract is up and taking a 75% discount on that number.