To everyone questioning whether this might be as a result of Apple asking them to change, and not believing it, I can't understand why this is so hard to believe.
Maybe Apple is trying to reduce the number of used iphones on the secondary market. For every iphone ATT lets a user upgrade early, that's one iphone Apple doesn't sell to someone who wants a new iphone. Remember Apple is still selling the iphone 4 (and until yesterday, the 3gs)
ATT doesn't care what phone you use, you are tied into a contract, they are getting paid either way. Only Apple has something to lose if ATT allows you to upgrade.
I don't buy it. Apple has everything to gain to sell as many iPhones as possible as fast as it can and no matter if it was via an upgrade or not. AT&T not allowing 12 month upgrade cycles actually hurts Apple but it's out of Apple's hands. Apple doesn't dictate subsidies to carriers. Apple merely sells phones to them at FULL price. The carriers determine subsidy terms.
The sooner a carrier allows you to upgrade inside your 2yr contract the less they end up subsidizing the phone you want to upgrade from. This puts downward pressure on their profit margins especially when all the carriers are spending mad money by continually upgrading their networks.
12 Month Early Upgrade ($299 Subsidized iPhone)
$450 Subsidized over 20 Months = $22.50 per month
$450 Subsidized over 12 Months = $37.50 per month
How much per month can a carrier afford to subsidize an iPhone plan?
No one really knows but say the average iPhone customer's bill is
$100. With a 12 month upgrade cycle in this case 37.5% of the cost of
the monthly plan is being subsidized. Throw in capital expenditures for
maintaining and upgrading their network plus operational expenses and I would
bet the leftover profit margin isn't where they want it to be versus enforcing a hard 20 month upgrade cycle (22.5% of monthly plan). I'm not saying the carriers don't make a big profit just that they realize they can make more if they spread out their subsidies over a longer term.
What about competition driving down early upgrade cycles? Well, in my opinion there isn't enough competition. I'd argue all the major carriers practice "Monkey See Monkey Do". They all lightly compete with each other. Unno, don't rock the collusion boat, they all laughed taking voice rates, then txt rates, and now data rates to the bank.
My advice, keep your smartphone for 2-3yrs and during that time save up the cash to buy your next one unsubsidized. No contract obligation and less stressing about whether or not your upgradable.