Nope your still on contract and Verizon recently charged their policy about about yearly upgrades. It will cost you full retail price with no discounts until your 2 year contract is over. Full retail price for the iphone 16GB will be 649.99. Otherwise you can wait until your contract is officially over which the iphone will cost you 199.99 for 16GB.
Your best best is to contact Verizon wireless customer care and ask them if you are eligible after 1 year to upgrade your cell phone, which I doubt that they will give you the iphone for 199.99.
