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When to upgrade?

Skip the S2, that isn't an upgrade to many phones at all. You don't want to buy a 2 year old phone that is almost obsolete right now.

I would say wait until the new Nexus is announced at least. It sounds like you keep phones for a couple years since you are on an upgrade cycle. The Nexus 4 is an awesome phone, but at 5 months old it is almost half way through it's life cycle of being on top already.

If you can't wait and you can afford it, buy the Nexus 4 without a contract for $300 and save your upgrade. Then if you decide you want a Nexus 5, Galaxy S4, or whatever use your upgrade on that and sell the N4.
 
I'd hold off and consider the S4. Google may or may not be announcing the next Nexus next month - although even they do it will be a couple months before it is released. At the very least you are likely to see price drops over the next few months.

Personally - though my real advice would be don't sign another contract. Find a good prepaid service and get a good phone on it. Yeah you'll pay a bit up front, but I guarantee you'll save much more over the long run and you'll no longer be beholden to the carrier determining when you upgrade.
 
I'd agree, I'll be moving to a monthly rolling SIM only deal when my contract ends in May and my wife (who's already on a Monthly rolling SIM only deal will be getting a new SIM-Free phone soon. Buying the phone outright and going SIM-Free or PAYG is the way to go.
 
@chrlswltrs - What do you mean by save the upgrade? Do upgrades have a special discount on phones or something?
Yes, that is why you have a contract. It ensures the carrier recoups the money that they pay for your phone. For example the Galaxy S3 is about $650, but using your upgrade or a new contract you can get it for $100. The price you pay varies based on current offers by which ever carrier you choose, but the price of the phone doesn't change, someone has to pay that difference.

The exception to this is Tmobile. They have no contracts, you make a down payment, then interest free payments on the remainder of the phone.
 
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