iPhone supply lives to sell another day

In both New York and San Francisco, lines that had stretched for blocks outside Apple retail stores dissipated rapidly as cheering employees high-fived the first iPhone customers as they were ushered inside in bunches just after 6 p.m. local time. But at AT&T's stores, where lines were shorter, the pace of iPhone distribution was slower.

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Hundreds of people had lined up as early as Monday to be among the first people to accompany Apple on its maiden voyage into the smart-phone market. The iPhone, a touch-screen smart phone capable of browsing the Internet, playing music and videos, and making phones calls, generated almost unprecedented coverage from both the technology and mainstream media during the six months between its introduction at Macworld and Friday evening.

Any concerns about supply, at least at Apple stores, were moot, and standing in line for a day or more proved as necessary as snow tires in Miami. Ninety minutes after Apple started ringing up sales of the iPhone at its 24-hour flagship store on 5th Avenue in New York, anyone could just walk into the store and pick up a device with a minimal wait. In San Francisco, security guards put away the ropes marking the iPhone line at 7:09 p.m. and starting letting in anyone off the street.

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At 7:30 p.m. at San Francisco's 3rd and Market AT&T store, about 25 people were still lined up waiting to receive their iPhones. Two hours before the gadgets went on sale at a different AT&T store a few blocks away, a man who appeared to be a manager assured a customer that they had "a pretty healthy amount" in stock just as the store closed to prepare for the launch.

However, CNET Networks employee Morty Okin, who arrived at the 3rd and Market AT&T store at 5 p.m. to wait for an iPhone received the last 8GB model at 7 p.m. "After that, a crowd of people dispersed," said Okin, who is photo product manager for CNET Reviews.

Of course, it's way too early to say how well Apple's iPhone sales did Friday night, and potential buyers should check Apple's retail Web site, where they can figure out how many iPhones are in stock at local Apple stores. As of Friday evening, Apple was projecting that iPhones would be available at every U.S. location on Saturday.

Of course, consumers can also order directly from Apple on the Web site.

At New York City's Apple store on 5th Avenue, the tourist-heavy underground retailer with a giant glass cube for an entryway, the scene could only be compared to a massive but well-organized sporting event. The press and spectators were a mob scene, but iPhone hopefuls were kept in a neat single-file line and could only enter and exit the store through a gauntlet of cheering Apple employees. A similar crush of cameras could be found on Stockton Street outside the San Francisco Apple store.

That was also the case at the Apple store in Arlington, Va., as earlier reported. The final seconds to launch brought a chanted countdown from the front of the line and sporting event-like cheers of "i-Phone! i-Phone!"

Apple CEO Steve Jobs made a brief appearance at the company's store in downtown Palo Alto, Calif., interacting with customers and generally overseeing one of the most important launches in the company's history.

The first people in line for the iPhone beamed as they were received inside the Apple stores like rock stars taking the stage. Apple retail employees had set up several demonstration models of the iPhone on white tables through the store, but these customers--some of whom waited for days--didn't need to take a test drive.

Within a few minutes of the doors' reopening in Arlington, a silver-haired man named Stephen Easley--who did, in fact, set up camp outside the store at around 10 p.m. Thursday to be the first in line--emerged to cheers with a pair of iPhones nestled in special black shopping bags, which he displayed for photographers. In San Francisco, Jerry Taylor held his iPhone high as he exited the store, apparently not having received the offers he had sought for his spot in line.

People's reasons for wanting an iPhone varied. A San Francisco resident who was first in line at the Fremont and Market AT&T store said she was dazzled by "the combination of all these things, there's so much it can do." The woman, who said she was slightly embarrassed to be first in line and therefore didn't want to be named, had never owned a smart phone before and therefore wasn't as concerned about potential flaws--such as the slow EDGE network or the touch-screen keypad that bedeviled some of the early reviewers.

But several others, including Taylor, were hoping to make a quick buck off the popularity of the iPhone. Apple was allowing customers at its stores to purchase two iPhones, while AT&T was only selling one iPhone per person at its stores.

An immediate market for iPhones sprang up on eBay and Craigslist Friday evening, as those who had waited in line hoped to cash in on their wait. Some were asking for well over $1,000 for a device priced at either $499 for the 4GB version or $599 for the 8GB version. It's unlikely those prices will hold up through the weekend if iPhones remain readily available at Apple stores, disappointing many with hopes of profiting from the iPhone.

Earlier in the day, those queued up outside the downtown San Francisco store were merging into one big, happy, MacBook Pro-toting family as they whiled away the hours on the city sidewalk.

Dale Larson had claimed either third or seventh place in line for the iPhone in San Francisco, "depending on how you count," he said. Larson looked like he stepped out of one of the office towers nearby, sporting a perfectly creased gray pinstripe suit and working diligently on his Apple laptop. His secret? He lives nearby and a friend swapped with him while Larson freshened up this morning.

Besides a change of clothes and a shower, Larson said he and his fellow line-sitters had been well taken care of.

"There was a drive-by pizza-ing last night around 9," he said. A stranger delivered a couple boxes of pies, which all those in line shared. Early Friday morning, famed chocolate maker Ghirardelli sent over complimentary chocolates, while Apple employees were doling out Smart Water.

And, perhaps most importantly, Larson said Apple had allowed him to recharge his MacBook Pro three times. No word on whether they'd have done the same for ThinkPad or Vaio users.

Some saw the media vortex as a marketing opportunity. Tom Sammons, a 19-year-old recent transplant from Chicago, opted for a comfy leather club chair over the garden-variety foldable camping seats and blankets the rest of those waiting in line used.

His aunt dropped him and the chair off on the street and packed with him a sign reading "Lung Cancer Matters Too!"--a plug for the Bonnie J. Addario Lung Cancer Foundation on whose board she sits.

Ben Martinek waited 30 people back in front of the 3rd and Market AT&T store, which was slightly ironic, as he is just two weeks removed from being an Apple employee. He quit his retail position with Apple in Washington, D.C. before news came that each of Steve Jobs' worker bees would get complimentary iPhones.

"Hindsight is 20/20, I guess," Martinek laughed.

CNET News.com's reporters Caroline McCarthy and Anne Broache, as well as CNET TV's Veronica Belmont, contributed to this report.