I am extremely surprised that Apple has depleted supply of the iPhone 3G after 10 days on sale. I’m sure it surprised Apple too. They had to have sold 2 million iPhones in the past 10 days and this shortage is probably going to last another 2-4 weeks until supply is replenished. There are champagne bottles cracking open over at Apple this week and I send my congratulations out to them.

What does this mean?

1. A lower initial price of $199 is important to consumers. As I said before, $199 speaks to consumers and they don’t care about paying more over the course of a 2 year contract.
2. The iPhone doesn’t do everything that a Blackberry or Nokia N95 does but simple and sexy wins overall
3. People don’t care about being locked in. With iPhone you have to use iTunes for every bit of content (even ringtones) and consumers don’t care.

Gone are the days of downloading apps or ringtones from the Internet and dropping them onto your smartphone via USB cable and Apple’s ongoing revenue stream from digital distribution sales will bring them cash for years to come.

Good for you Apple. The iPhone has a long way to go and adding features but maintaining simplicity will be a challenge that I’m sure Apple will pull off. The 2.0 software is buggy as hell and I pray for a fix very soon.