Depending on who your carrier is, it makes more sense to upgrade every year than not. For example, if you are on an existing Verizon Share Everything plan, having a phone on a payment plan knocks $25 off the $40 per month line charge, and after half of the phone is paid off - in 1 year - you can trade it in and upgrade with no money out of pocket or just sell the phone outright and pay off the current payment plan then finance a new one (I actually turned a $200 profit doing this last September). As long as you don't buy the phone with the largest storage option, you can finance a phone for less than $25 per month and actually end up paying less than if you paid off the phone in 2 years or bought it outright.
Another added benefit is that your phone is always under warranty. iPhones are only warranted for 1 year by Apple. If you upgrade every year, you never have a phone out of warranty.
In this case, the suckers are the ones who buy their phones or pay them off and don't upgrade. You think you'll be saving yourself the monthly payment, but it comes back when the monthly returns to $40.