New iPhone Goes On Sale Without a Hitch

In its two-year life, the iPhone range has revolutionized phone design and given AT&T a leg up on its rivals in recruiting customers willing to pay high monthly fees.

Competitors have started to catch up to some of the iPhone's signature features, like a user interface that's designed from the ground up to be navigated with finger touches. In particular, Palm Inc.'s Pre, which came out two weeks ago, has generated a lot of buzz and favorable reviews.

But the iPhone is still the king of smart phones. Pacific Crest analyst James Faucette estimated that exclusive carrier Sprint Nextel Corp. sold 90,000 to 100,000 Pres in the first week of sale, far lower than expected sales of the 3G S.

To grab even more market share, Apple is now selling the older 3G for a lower price: $99 with a two-year contract.

At an AT&T store in the New York borough of Queens, there were three people in line at 5:45 a.m. Sarah Gates and Ed Phyfe, the couple who were first in line, didn't know about the pre-order option until it was too late, and wanted to be sure to get phones from the small stock set aside for walk-ins.

"We got Sprint smart phones since just before the first iPhone came out, and we immediately regretted it," said Gates, 33. She has nothing against Sprint Nextel Corp., but the Motorola Q phones were awful, she said.

"I feel kind of bad to leave Sprint ... but I don't like any of the phones they have half as much the iPhone," she said.

Apart from the U.S., the phone went on sale Friday in Canada, France, Germany, Italy, Spain, Switzerland and the U.K. Other countries will get it throughout the summer.