Uhhh, yes? That's how the world works...
People line up for days to pay $700+ for a new iPhone every year. You think they could charge as much as they do, if they were irrelevant? Nope.
Those iPhone lines outside Apple stores, are not people paying $700+ cash out of pocket for a new iPhone. In the U.S 99% of them are carrier contracted or whatever the new finance options are. Nobody is actually paying the full retail price all upfront, they are just putting down $199 at the most, or on these "Jump on Demand" plans that cost just the tax of the phone to get the new model.
The day the U.S. carriers require you to pay the full amount upfront all at once for a new phone, is the day smartphone sales drop dramatically. Most people will not plop down a whopping $700 for a cell phone, no way not gonna happen in large numbers here in the States.
Off topic;
If I had to poll everyone I know, family, friends, coworkers, and client so mine. Let's say that's 200 people or so. With the vast majority very well off, most making well over $100k a year each. Out of those 200 people, I can count on one hand the number of people that would actually pay full price for a new smartphone. Most of them, 95%, stick with the same phone for 2 or 3 years, and only upgrade on their phone contracts timeline, or even after that, and wait for their phone to practically be broken, or stop working before they upgrade. Out of all of these people, who are financially well off, I don't think any of them would ever dream of paying $700 for a cell phone. And i think that's the pulse for most Americans and their smartphones.