Before you consider upgrading your hardware, I think you should take a closer look at iOS 7 and compare it to the features of Google/Android OS.
I've been an Apple guy from Day 1 (back in the 80s), but even I have to admit that Jony Ives and his iOS 7 are taking Apple's mobile OS more in the direction of mirroring Google's.
Cosmetically, I'm disappointed that Ives is abandoning skeuomorphism in favor of the "flat" design. It feels like only yesterday when Apple was touting the beauty of the retina screen, and how the details of all its skeuomorphic icons and apps really shone. That kind of design aesthetic is what set Apple apart from the "business-only" designs of Microsoft and Google.
Apart from the interactive depth feature of iOS 7, many, many other design elements look very much like Windows Aero. Also, the hardware itself will be moving in a "cheaper" direction with the introduction of the colored aluminum phones as an option.
Since the design aspects of both the hardware and OS are taking a more generic turn, it's worth taking a closer look at how Apple's OS compares in functionality to its competitors. Apple Maps was (and still is somewhat of) a disaster. Google Now, as well as other voice command features, are very competitive with Siri. Gestures are also a feature of functionality that has become much more closely competitive. There's also the notion of the need to "jailbreak" to consider.
Like I said, I've always been an Apple fanboy, but the introduction of iOS 7 has given me pause to take a closer look at the competition. Quality of hardware and aesthetics no longer hold the same significance at Apple since Steve Jobs died (sad day for me!). Personally, I'm finding that I can't excuse functionality (or lack of) for reasons of aesthetic form any more, and the gaps in functionality between Apple and competitive OSs is getting much smaller. I think it's now worth considering less expensive alternatives.
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EDIT: Per techcrunch.com:
only the iPhone 5 and iPod touch will get all the features announced at WWDC. The iPhone 4 and 4S will only get the new iOS 7 look and a splattering of features. And forget about the iPhone 3GS and older iPhones. They will be stuck in the skeuomorphic world of iOS 6 forever.
You might consider the option of holding on to what you currently have until your contract expires. (If you want to buy some time to consider researching your options.)
Updated On: 6/20/13 at 10:25 AM