I know you can use it with any phone but you still need to differentiate between a surfing and a telephony-only contract so if you use a telephony-only contract with a smartphone it's going to cost you an arm and a leg if you surf the net.
Let's say I bought the 32GB iPhone for CHF899 at the Apple store and got a contract for CHF169 Francs per month with unlimited calling and internet, but I can just walk into my local mobile store and get it with a contract for just CHF399. So, where exactly did I save buying them separately?
I can still use my "new" sim card with my old phone or get another smartphone without contract. It may cost me full price, but it'll be unlocked.
The examples I gave were for a smartphone sim only contract - as I said, it's
exactly the same as a "normal" iPhone contract but without the add-on to pay the subsidised cost of the phone. The saving is purely because you aren't paying for the purchase of a handset with your monthly payments
The following is applicable in the UK: Things may be different in other countries
If you see out your contract and them immediately change your phone then there's no difference in total cost.
However, if you don't change your phone at the end of your minimum period, the telco will continue to charge you the same monthly payment (i.e. you're paying an additional £15 a month for no benefit at all)
Also, if you want to change your phone half way through your contract, you have no choice but to pay full price for your phone and still continue to pay the original subsidy for the phone you no longer have
Overall, getting a subsidised phone won't save you any money at all and the only way to make it work is to change your phone each and every time you get to the end of your minimum period.
Buying the phone outright costs you more up front but gives you far more flexibility to change your phone when you want to, not when the telco wants you to and separates the provision of your telephone service from the physical device