AT&T is the phone's exclusive wireless carrier for the first two years, which many early reviewers cited as the phone's biggest drawback.

Brooklyn accountant Grant Johnson, 41, was one of the first to walk out of Apple's Fifth Avenue outlet clutching the prize.

"I haven't slept in a day and a half," he said. "I need a nice hot shower and a bath."

Early hitches included a hiccup in AT&T's retail computer system that delayed some East Coast sales for 45 minutes and a sluggish response from Apple's online store shortly after it began offering iPhones.

Technology gurus have praised the iPhone as a "breakthrough" device but questioned whether users would be unhappy with shortcomings such as its lack of a hardware keyboard and pokey Internet link.

The light gadget is a gamble by Apple co-founder and chief executive Steve Jobs to build upon his company's best-selling iPod music player and expand the market for its software and media services.

Apple aims to sell 10 million iPhones in 2008, which would amount to a 1 per cent share of the global market. © 2007 Australian Broadcasting Corporation