Always get the latest, greatest smartphone.

Smartphones are obsolete in about 18 months from when they are released.

Cell phone contracts are usually 2 years long.

The latest/greatest new cell phone costs about $200 (w/ contract). The contract itself will cost you at least $1900 over the next two years.

You can sign up to pay that $1900 and get a phone that will be obsolete in days for free, or pay $100 less for last years model which will be obsolete in 6 months. 

But you will have to spend 18 months to the full 2 years cursing your phone and envying your friends. Your smartphone contract is the major expense. The upfront cost of the phone is not.

Buying the cheap phone is tying yourself into at least an extra year of expensive unhappiness.