Depends on how you do it. If you are smart about selling your old systems, you can be up to date by paying 100$ per year.
There is that, I agree that the resale of used Apple products is quite high, but to get like for like on an upgrade (iPhone 4 16GB for iPhone 5 16GB) I would still have a difference of £170 (I could sell the IP4 at Mazuma mobile for £320 now) now add that difference to the £170 that I would have lost last year on on an upgrade, then the yearly cost is a hefty £340.