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Apple Inc.'s new iPhone 3G drew tens of thousands of buyers in cities from Tokyo to New York yesterday, with software glitches disappointing some shoppers and short supply leaving others camped out last night.

iPhone 3G

AT&T Inc. said a worldwide breakdown in Apple's iTunes service prevented some U.S. shoppers from activating the handset in its stores as planned. O2, a U.K. mobile-phone service, said Apple's sign-up service was working ``quite slowly.''



Chief Executive Officer Steve Jobs introduced the iPhone 3G, which runs on speedier third-generation wireless networks, in 22 countries yesterday, almost four times as many markets as before. Partners in the U.K., Germany, Canada, Mexico and Japan said many shops ran out on the first day. AT&T said most of its U.S. outlets sold out and that some customers remained camped out.



``This is all in all a very high-class problem,'' said David Garrity, director of research at Dinosaur Securities Inc. in New York. ``The overseas stock-outs reflect strong pent-up demand.''



Piper Jaffray & Co. analyst Gene Munster estimates that Apple may sell as many as 4.08 million new models this quarter. The first buyers of the device in Japan lined up for half a mile (800 meters) in Tokyo. In Madrid, workers at Telefonica SA's flagship store gave out T-shirts to help protect the hundreds of people in line from the 86 degrees Fahrenheit (30-degree Celsius) heat.



Around the Block



At Apple's store on Fifth Avenue in New York, some shoppers formed a three-deep snake line that occupied half a block, while others waited in an overflow line down a side street.



``It's great to come out here and sit with other Apple enthusiasts,'' said Geoff Kaicher, a 17-year-old student from Montclair, New Jersey, who lined up with three friends.



Not all consumers went home happy. Rogers Communications Inc., Canada's largest wireless carrier, asked employees to postpone buying iPhones to leave some for shoppers after selling out at stores in Ottawa and Halifax, Nova Scotia. Customers in Mexico said some outlets reported they had no iPhones available.



``I don't like it. The whole world said they were arriving today, that they'd be everywhere, but they don't have them,'' said Sergio Valtierras, a 28-year-old marketing student, as he left a Telcel store run by America Movil SAB in Mexico City yesterday. America Movil spokeswoman Patricia Ramirez said she wasn't aware of any shortages.



Software Delay



In the U.S., the iTunes problem forced AT&T, Apple's exclusive partner there, to tell shoppers they would have to link up to Apple's service later from home. Both companies had said earlier this week they expected the purchase and activation process to take less than 15 minutes.



``We will replenish supplies in the coming days,'' Michael Coe, a spokesman for AT&T, said in an e-mail, noting that most of the company's 2,000 stores were out of stock. ``Some customers are camped out for the night waiting for their new iPhone.''



Popular Apple fan site AppleInsider.comdescribed the debut as a ``nightmare for both the company and its loyal customers,'' while The Unofficial Apple Weblog chronicled one buyer's four- hour wait for the phone. Apple spokesman Steve Dowling declined to comment. The company also makes Macintosh computers and iPod media players.



Jobs introduced the original handset in June 2007 and sold more than 6 million before running out in May. The iPhone held the No. 2 spot in the market for smart phones, which offer Internet and computer functions, behind Research In Motion Ltd.'s BlackBerry in the first quarter, according to researcher IDC.



With the 3G model, Apple delivers a device that's twice as fast as the original version. It has better audio quality and a built-in global positioning system, and lets users run software from outside developers.



New Countries



Yesterday's debut brings the iPhone to 16 new markets, including Japan, Mexico, Canada, Australia, Spain and Hong Kong. Jobs said he plans to offer the device in 70 countries in coming months, bringing him closer to his goal of selling 10 million iPhones this year.



In the U.K., wireless provider O2 and Carphone Warehouse Group PLC said stores sold 40 iPhones an hour, more contracts than they typically sell in a day. Deutsche Telekom AG, Europe's largest phone company, said it sold more than 15,000 units of the new version as many shops ran out.



The handset also sold out at many stores in Japan, with Bic Camera Inc. and Yodobashi Camera Co. saying they got rid of their entire inventories, estimated at more than 1,000 units for each of the chains, the Nikkei newspaper said.



Apple, based in Cupertino, California, fell $4.05 to $172.58 yesterday in Nasdaq Stock Market trading. Dallas-based AT&T dropped 19 cents to $32.58.



When Hiroyuki Sano, who traveled 350 kilometers (220 miles) to be first in line in Tokyo, emerged with his iPhone, he was chased by a pack of about 30 journalists. He gave up trying to outrun them after four blocks.



``I'm extremely happy,'' said the breathless Sano, who turned 25 yesterday.



To contact the reporter on this story: Connie Guglielmo in San Francisco at [email protected] bloomberg.com