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Apple may have sold 500,000 iPhones

Apple Inc's initial iPhone sales may have beat analysts' top projections, suggesting chief executive officer Steve Jobs will reach his goal of making mobile phones as profitable to the company as computers and the iPod.

Shoppers bought as many as 500,000 units over the weekend, Piper Jaffray analyst Gene Munster said, more than twice his projection of 200,000.

J.P. Morgan Securities Inc analyst Bill Shope estimated sales were 312,000. Before the phone's debut analysts expected Apple to sell 50,000 to 200,000 units.

More than a third of Apple stores were out of stock by last night, according to its Web site, forcing shoppers in states such as Hawaii and Utah to try AT&T Inc stores.

The company, the exclusive provider of wireless service for the iPhone, said most of its 1,800 stores sold out within 24 hours.

"This is a very successfully handled launch," Munster said. "The real sign of success would be what kind of legs this product has in 2008 and 2009. In 2009, we estimate a third of Apple's sales will be from iPhone. This is a huge product."

Shares of Apple fell US$0.81 to US$121.23 in Nasdaq trading.

Mark Siegel, a spokesman for San Antonio-based AT&T, declined to confirm whether stores had completely sold out of the device, saying only that "things have just gone extraordinarily well."

AT&T is still fixing problems for some customers who can't activate their new phones, Siegel said.

Some business customers need approval from their companies' communications departments to switch to personal subscriptions, he said, but the "overwhelming majority" have activated the phone.

Siegel declined to say how many iPhones the company has sold or how many switched to AT&T from other service providers. AT&T's calling plans for the phone cost US$60 to US$220 a month.

Sales started on Friday in the US as Jobs sought a foothold in what he called a "giant market."

The iPhone, which costs US$499 and US$599 in stores, sold online for an average price of US$740, with the highest at about US$12,500, data from eBay Inc showed.

There's "nothing else like" the iPhone, said Michael Gartenberg, an analyst at JupiterResearch in New York. "Most consumers have never seen that kind of functionality."

At Apple's store in New York's SoHo neighborhood, fans counted down the minutes and then the seconds as employees in black-and-white T-shirts arranged iPhone displays. The first two phones went to film director Spike Lee and actress Whoopi Goldberg.

"I am an Appleholic," said Stephanie Richmond, who bought her 8-gigabyte iPhone from Apple's Fifth Avenue store in New York. "I have every Apple product, and I think they're all great."

Customers are allowed one phone each at AT&T's stores and two at Apple's outlets. Shoppers can check Apple's Web site to see if the iPhone is in stock at any of its stores. There's a wait of two to four weeks for customers who order the phone online from Apple, the company's Web site said.

The iPhone merges the capabilities of Apple's iPod with a handset that is equipped for Web pages and e-mail, pitting the product against less expensive ones from Nokia Oyj, Samsung Electronics Co, Research In Motion Ltd and Palm Inc.

Shoppers interviewed at Apple's stores in New York and California favored the US$599, 8-gigabyte model over the 4-gigabyte version.

"For US$100 more, you get double the storage," said engineer Rick Evans, 50, who picked up his iPhone opening night at Apple's store in Stanford, California.

Jobs said last week that Apple had boosted manufacturing to meet estimated demand. "We've taken our best guess, but it wouldn't surprise me at all if it ain't enough," Jobs, 52, said in an interview with the Wall Street Journal.

Under his leadership, Apple's annual profit has surged to almost US$2 billion from US$65 million in the past five years.
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