It's a 24 month agreement, but you can upgrade every year.
http://www.apple.com/shop/iphone/iphone-upgrade-program
True, but I think what he was getting at was financing over 12 months and keeping the phone. The annual upgrade option would require you to trade in the phone. While convenient (quite convenient actually), trading up at 12 months effectively reboots the financing, and you've traded in a phone that you've paid 50% of the value on (and at 1 year an iPhone likely has much more than 50% of it's original value). Brilliant plan by Apple really.