Apple iPhone now on sale

Fashion addicts, hardcore geeks and those just wanting to ride the bandwagon for a change stood side by side in less than spectacular weather as the Apple iPhone finally went on sale this evening.

Many had been in place since Monday, many others either paid people to queue for them or had teams of friends taking turns to hold a place in line. Scenes normally reserved for music festival tickets and the launch of a games console were prevalent all over US East Coast as people clamboured to get their hands on ..... a mobile phone!

In scenes that will be repeated across the US as central and West Coast states hit 6pm, more than 600 people were lined up at two Apple stores in New York, and the crowd cheered at one of them as the doors opened. Smaller groups of several dozen customers waited outside AT&T stores, the exclusive US carrier network for the iPhone for the next two years.

About 200 people stood outside a San Francisco outlet for a device that has whipped technology lovers into a frenzy not even seen when the iPod was launched.

"The phones out there are just garbage. I've gone through several phones, even the expensive ones. This is different," said Albert Livingstone in Chicago. "It's the newest toy. I'm 62 - I don't have much time left to buy toys."

The iPhone melds a phone, web browser and media player. Technology gurus praised it as a "breakthrough" device even though it uses older, proven technology rather than more recent innovatons such as 3G cellular or 802.11n Wi-Fi, but questioned whether users would have a hard time with its smooth touch-screen, instead of a keyboard, and pokey internet link.

Apple aims to sell 10 million iPhones in 2008, which would amount to a one per cent share of the global market. It has not given a goal for the device's launch, but some analysts said it could sell up to 400,000 units in the first few days.

"Apple shares have already benefited from a powerful hype cycle," Cowen & Co. analyst Arnie Berman wrote in a report.

This evening's launch is also viewed as a test of wider US demand for advanced phones, which have already caught on in the UK, Europe and parts of Asia.

Judging by its first customers, the phone seemed to draw an older generation of gadget geeks rather than young phone users with disposable income who may have been put off by the high price and potential risk of theft and mugging associated with such a desirable item in short supply. Also a factor may have been that purchasing an iPhone requires signing a two-year airtime service contract that starts at about $1,400 (₤700).

Some aimed to make a personal profit from the iPhone, which costs up to $600, by selling it on eBay or being paid to queue or place hold.

"I'm definitely a mercenary," said Kyle Laurentine in San Francisco. "I am 17 years old and I don't need an iPhone. I have an iPod and a phone. Together they do the same thing."

Apple is expected to sell the iPhone in the UK in October. It has not disclosed the price or carrier, though speculation has mounted it may reach a deal with Vodafone.

But the iPhone's effect has rippled through the wireless industry before even a single unit has been sold.

Rival Palm expects a short term hit on sales of its devices, while most retailers have reported a slowing in sales of new phones and upgrades in the last month as people have chosen to wait and try the iPhone before investing in a new handset.

Pacific Crest analyst Andy Hargreaves raised his revenue estimates for Apple due to his belief that Apple had ample supply of iPhones to meet initial demand.

"We believe the company is positioned to add new digital media services that could add over $1 billion in annual revenue at an above-average margin," Hargreaves wrote.

(Additional reporting by Sinead Carew and Robert MacMillan in New York, Regan Doherty in Chicago and Eric Auchard in San Francisco)

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