[jeffpalmer]

You make a very interesting point here. My thinking was that the yearly upgrade programs such as AT&T's "Next" would drive even more growth as consumers upgraded their phone every 12 or 18 months. It would seem that these programs might not be so popular after all.

[joezydeco]

But Apple must have some insight into the process, since they quietly introduced their own 12-month upgrade plan:

http://www.apple.com/shop/iphone/iphone-upgrade-program

(Oh yeah, with free AppleCare+ insurance)

It sure looks like Apple is planning for a future where everyone is paying $25/mo forever to lease the latest handset that tickles their fancy, with the carrier being a swappable option.

[pcurve]

I think the intent behind "Next" program is to mainly mitigate loss of subsidy, rather than drive growth. ATT makes no money selling these phones; they make money on smartphone data plan. If vast majority of your clients are already on smartphone data plan, then there's not much incentive to keep the subsidy.