Apple Sells 1 Million New iPhones

NEW YORK (Reuters) – Apple Inc said onMonday it has sold 1 million units of the new iPhone in its initialweekend, on par with estimates set by analysts, sending its stockrising more than 2 percent.

The original iPhone, introduced in late June 2007 in the UnitedStates only, sold about 270,000 units in its first two days. Sales hadtopped 1 million units by early September. The new device sells in 21countries.

Apple executives were pleased with the early results. "IPhone 3G hada stunning opening weekend," Apple Chief Executive Steve Jobs said in astatement. "It took 74 days to sell the first 1 million originaliPhones, so the new iPhone 3G is clearly off to a great start aroundthe world."

Still, iPhone sales pale compared with those of established mobilephone makers, such as Nokia Oy, which sells almost 10 million phoneseach week, or Samsung Electronics Co Ltd and LG Electronics Inc, whicheach ship more than 100 million phones a year.

While those phone makers often unveil dozens of models in year,Apple has only one, and its sales spark a retail frenzy as consumersaround the world line up to grab one.

The iPhone 3G still has the popular touch screen, but also offers afaster wireless network and the ability to download third-partyapplications like games.

Perhaps more important, the new iPhone sells for about $200 in the U.S., about one-half the price of its predecessor.

"We don’t yet know the breakdown of how many phones were sold to newcustomers and how many existing iPhone customers upgraded, butregardless, sales during the first weekend were very impressive," saidJeff Kagan, an independent telecommunications analyst, in a note.

Analysts said iPhone sales may dent sales and profit margins at Samsung and LG this year.

Activation problems marred its U.S. launch on Friday, with manybuyers leaving stores frustrated that they could not use the hotlyanticipated gadget after waiting in line for hours.

AT&T Inc, the sole U.S. carrier for the iPhone, blamed problemssynchronizing the phone with Apple’s iTunes online music and softwarestore, saying it was probably caused by too many people trying toaccess iTunes at the same time.

Analysts expect Apple to exceed its original target of 10 million iPhones by the end of 2008.

"The iPhone 3G launch was clearly not as smooth as last year’slaunch. However, demand was clearly strong across the U.S. …," saidMorgan Keegan analyst Tavis McCourt in a note to investors.

Shares of Apple gained $3.85 to $176.43 on Nasdaq, where it wasamong the most active issues. The stock, down about 12 percent so farthis year, earlier hit a session high of $179.30.

(Reporting by Franklin Paul; Editing by Lisa Von Ahn/Jeffrey Benkoe)