Representitive Example:
£718 purchase over 20 monthly payments at 0% p.a. (fixed) would cost £33.45 per month. £49 upfront payment required.
Total cost of credit £0. Total amount of credit £669.
I think you've gotten your numbers slightly wrong Mic. The upfront required payment comes off of the balance, not added to it.
So you take the cost of the iPhone you want (example above, £718) - £49 upfront payment = £669 credit / 20 months = £33.45 p/month (which already includes AppleCare+ and option to upgrade every year).
After 11 months of payments, you can 'upgrade' to the new model (basically, Apple pays off the remaining credit to Barclays, and you sign up to a brand new agreement), hand over the old iPhone, get a new one; rinse and repeat. If you don't want to upgrade, you simply pay all 20 monthly repayments, and your original iPhone is yours to keep.
There is another option available, but without AppleCare+ and option to upgrade every year, which doesn't cost as much, but is also 0% interest - see the text ' You can also choose to make low monthly payments without AppleCare+' at
http://www.apple.com/uk/shop/iphone/iphone-upgrade-program