While this is accurate (bar the actual prices) what's actually happening is that you're leasing the phone... when you take a second new iPhone after 12 months, you're starting another 2 year commitment... so essentially... you only get a new phone every year if you commit to continued payments of £40 / month to Apple, for ever.
What they didn't make clear was what the exit strategy was... theoretically, if you start paying £40 / month.. take a new phone after 12 months, you're in for another 48 months....
So.. 2x new iPhones... will cost you £1,440 (@£40 / month) over 36 months