Never before the iPhone did I care much about a cellphone, it was merely an appliance that did a basic function. And so, upgrading every two years or so was not an issue. However, when I purchased my iPhone two years ago, I now cannot imagine doing without it. The ability to carry an advanced smartphone with the internet, calendar, camera, ipod, and phone all in one package is just short of asounding. Not only does it make my personal life more enjoyable, but its been a great business tool that helps me make money. The productivity my iPhone allows is just amazing. So, after having bought the 3G last year, and now facing a unsubsidized price of $599 for a 16gb 3GS now, or a $399 price in about a month, its a no brainer for either price given the value of this platform is to me. In fact, going for the full retail price now without a contract extension actually makes more sense, as it allows me to upgrade next year at the full discounted price, when the new iPhone with even better hardware is released. And that may be the best strategy, ebay the old one every year, and average out over two years the subsidized discount. Between that and what I get by selling it, I'm most likely nearly breaking even, not to mention the sheer enjoyment of using this wonderful platform.