Sold Out

Apple reported this week that its initial quantities of iPhone 7 Plus smartphones have already sold out, and that the new jet black version of the smaller iPhone 7 is likewise sold out. Other versions of the iPhone 7 will be available only in limited quantities at tomorrow's launch.

Well, then.

"We couldn't be happier with the initial response to iPhone 7 and iPhone 7 Plus, and we are looking forward to beginning sales through our retail stores and partners around the world," an Apple statement reads. "During the online pre-order period, initial quantities of iPhone 7 Plus in all finishes and iPhone 7 in jet black sold out and will not be available for walk-in customers ... Beginning Friday, limited quantities of iPhone 7 in silver, gold, rose gold, and black will be available for walk-in customers at Apple retail stores."

This is interesting. And on a number of levels.

First, many have pointed to the lackluster iPhone 6 series of phones---which includes the initial iPhone 6, the iPhone 6S, and now the misnamed iPhone 7---as evidence that Apple has lost its mojo. IniPhone Meh? last month, I noted that Apple would eventually succumb to the same malaise that pushed Microsoft off its once-lofty perch, because it's hard to innovate when you’re on top.

But that doesn't appear to have happened. Instead, Apple's customers are responding to the iPhone 7 as if it were the major release that Apple claims it to be. They are upgrading in droves, and while we will need months of data to prove the point, this blockbuster start suggests that Apple will see success closer to that of the iPhone 6 in 2014 than to last year's more subdued iPhone 6S launch.

Secondly, many have criticized Apple for making customer-averse changes to the iPhone 7, most obviously with the removal of the headphone jack. And, yes, I've made this argument myself. But as I wrote in One Fewer Thing after the iPhone 7 announcement, we need to view this change in the context of the bigger picture, which is a step in a journey away from wires. Once again, Apple has taken a leadership role, and it will withstand the knee-jerk criticism that always accompanies such a stance.

And third, and perhaps most important, this success suggests that, for all the heavy responsibility that Tim Cook bears for the simple act of not being Steve Jobs, that Apple still has it. That special something that separates Apple from the rest of the industry. Yes, iPhone unit sales and revenues are slowing. And yes, the iPhone is steadily losing market share ground to Android. But Apple, through its core product, still triggers a wellspring of excitement whenever a major new version appears. Customers cannot wait to upgrade.

This is why Microsoft and other tech firms are so envious of Apple. They'd kill to have customers that are this loyal and this willing to throw so much money at them. Apple's iPhone business is, by itself, bigger than all of Microsoft. And those customers are far more...