Sorry, You were right initially, it's an extra fee and it does not even itself out. Look at it from a calendar year perspective. Regardless of what they do next year, in 2018 you would have paid 13 payments. There is no scenario in which in 2019 you would only pay 11 payments, always 12. I've gotten up in the middle of the night every year since the 4s to have the new iPhone 1st day. I've been "that guy"in the office that shows everyone all the cool features in the new phone like an excited kid on Christmas morning. But, because of the timing of last year's phone, I have to pay them an extra fee this year just so I can market for them for free. Love their products and will buy a new phone through their upgrade program each year but they don't need charity from me. Will wait another month (and never get another phone on 1st day again?) and purchase then. No Christmas morning in the office this year.