Yes that's an upgrade switch.
Actually AT&T calls this an
Upgrade Swap. It is also not limited to the iPhone, you can do this for other phones. Yes it can be very easy and you can even do it over the phone you don't have to go to the AT&T Corporate retail store, BestBuy or many AT&T authorized agents.
Last year there were some issues doing this for phones ordered from Apple. AT&T had assigned the ICCID and the IMEI of the iPhone 4 in their system. This meant that you had to complete the activation on the line that the upgrade was ordered against, this had some side effects. There were a few cases where individuals received a phone that had someone elses phone number and the iTunes activation step wanted the last for digits of the other customer's SSN.
Also last year there were cases where calling AT&T Customer Care to complete the Upgrade Swap over the phone resulted in long waits and issues when the Care rep activated the Micro-SIM before the iTunes steps were completed. This caused you to need an additional Micro-SIM and in many cases a new Mini-SIM (aka standard size SIM) for the line that the upgrade was actually ordered against.
Also, even when doing this in the AT&T Corporate store there were some issues reported. In some cases the RSCs ended up killing the active SIM on the phone that the upgrade was ordered against.
It was simple to fix, just provide a new SIM for the line that the upgrade was ordered against, it helps to have both phones available when doing an Upgrade Swap.
So this year expect some fun as there may be some changes to the steps.
😱
Dave