When Apple launched its iPhone 6 and iPhone 6 plus, it would be an understatement to say that I was unimpressed.

Similar hardware has been around the market for more than couple of years. Comparisons with Nexus 4. Even though these comparisons may be outrageous. But one has to agree iPhone 6 is just a — minor, wee-bit, here and there — better than the previous generations and there are comparable if not better handsets out there which are available at lesser prices. Smartphones have for long been in the sustainable innovation phase and I don’t expect any new out-of-the-box innovation and that is not a game which Apple is really good at. Other players doing it for cheap can do similar (if not same) stuff at lower prices.

So when I saw the news of record pre-orders on iPhone 6, it didn’t make any sense to me. Why would 4 million people want to buy and over-priced phone? And then it struck me that they are not.. The difference was that I was comparing the purchase process to India where we pay for the phone once and iPhone would cost somewhere around Rs. 65k, but in US majority of the people buy their new phone as a part of the contract. So the new iPhone is not $649 spend every two years, but a $199 spend over two years.

For this reason, Apple will continue doing well in NA despite coming up with incremental changes YoY. By the time my contract is over, the phone is good enough than my current phone to shell out $199. The Marketing buzz and the #fanboy tech blogs will take care of the rest.

I think this has to be one of the best use of value chain to retain customers and profits. If Apple had been selling the phones at retail non-contract prices and the comparison users had to make between $649 iPhone6 or $299 Moto X, then Apple probably wouldn’t be enjoying record sales every time they announced a new phone.