When you figure up the Next plan (or Edge plan from Verizon), you must factor in the ability of the standard contract (or uncontracted) customer to SELL their iPhone each year vs. trading in the device.
I've seen several break downs of the cost comparison between Next and standard contract...and if a person continues using AT&T, it appears that the Next plan would save them around $350-$400 over a 24 month period (if they traded in their device for a new device at the mid range, 12 month point). That savings does not factor in the standard contract holder's ability to sell the initial iPhone to off set the cost of the new model. I figured that, on average, you can usually sell an iPhone (standard 16GB model) for around $400-$450 after the release of a replacement model...multiply that by 2 (since at the end of the 24 month period they would essentially have two phones they could have sold for an average market price to offset cost).
So in the end, you have a range of $800-$900 off set to a standard contracted customer over 24 months vs. a Next customer who does not own either of the devices, and trades in the first for the second device at the 12 month point, and would still have to continue to pay payments for the 2nd device beyond the 24 month contract period. Factor in the price of an unsubsidized iPhone at the 12 month point for the regular contract customer, and you drop that offset about $250-$300.
That $350-$400 savings is negated by the offset of $800-$900 for the regular contract customer, so in reality, you're spending about $200-$250 MORE for the Next program if we were to try and equate the two.