If you are looking into buying a new phone, it seems best to continue buying one with a contract attached. Specifically, if you are a customer of AT&T or Verizon Wireless, it is in fact cheaper over the life of a two-year contract when compared to full-price.
As the Wall Street Journal reports:
Under a traditional contract with Verizon Wireless on a plan that includes 2 gigabytes of wireless data, you would pay $200 and an activation fee of $35 for the phone upfront and then $75 a month. Over two years, that comes to about $2,035. On the no contract version, you pay $65 a month for service, with no activation fee, plus about $27 a month over the period to [...]