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iPhone shortage hits NYC

Long lines have been forming outside Apple's flagship store on Fifth Avenue in New York City as anxious Apple shoppers try to get their hands on an iPhone.

Update: As of 4 p.m. EDT there was no line outside the Apple store on Fifth Avenue here. Then again, there weren't any iPhones left to buy either.

NEW YORK--Early on Thursday, Engadget reported that a 60-person line had formed outside the store. But by the afternoon, the line had dissipated and the store was buzzing with its usual crowd of shoppers. (Having lived in New York City for over 10 years it never ceases to amaze me how many people don't seem to have a job and shop all day.)

Outside Apple's Fifth Avenue store. Marguerite Reardon/CNET Networks

A store greeter confirmed a line had started forming outside the store around 2 a.m. Thursday. Why you might ask? After all, the flagship store on Fifth Avenue, which sits under a massive glass cube, is open 24 hours a day.

Apparently, people were waiting for a shipment of iPhones. And once the phones were gone, so was the line.

Nearly a year after the phone hit the market, Apple is struggling to keep them in stock. For weeks, news outlets have reported that some Apple retail stores have experienced iPhone shortages. An Apple spokeswoman confirmed that the online store in the U.S. and the U.K. has been sold out of iPhones for two weeks so far. But customers in France, Germany, Ireland, and Austria may still be able to get them online.

The Apple employees I spoke to at the store on Fifth Avenue said they've noticed a sharp increase in demand for iPhones in the past few months. And lines have been forming outside the Fifth Avenue store almost every time the store gets a shipment of new iPhones.

A potential iPhone customer plays around with the iPhone at the Apple store on Fifth Avenue. Marguerite Reardon/CNET Networks

Of course, this supposed shortage comes just as rumors ricochet through the blogosphere that the company will be introducing a new 3G version of the iPhone June 9 at Apple's World Developers Conference. So it seems a bit strange to me that people would actually stand in line overnight for the old version, which operates on a painfully slow data network, when the much faster 3G version is going to be in stores within a month.

But perhaps, the impending launch of the 3G iPhone is causing the shortage. Apple may be reducing manufacturing volumes of the older version of the phone in anticipation of the new version.

This is all speculation at this point. Apple is keeping mum about any rumors of the 3G iPhone. And the only thing the company has said about the shortage is that, "customer response continues to be off the charts."