The point made by Legere (T-Mob CEO) a few months ago was that we need to start seeing handsets for the sophisticated, lasting, pieces of technology that they are. He argued that handset subsidies have pushed us into a mindset where we see our phone as disposable, destined for upgrade every 2 years. When we take this perspective there is no shortage of available phones, we should just be comfortable with upgrading our handsets much less often than we are currently accustomed to.
Also, T-Mobile still allow you to pay off the cost of your phone over the length of the contract, so people will still be able to get state-of-the-art phones for a low upfront cost.