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iPhone 3G goes on sale worldwide

Demand causes server crashes at launch delaying activation for many customers

Apple's new iPhone 3G went on sale yesterday in 21 countries worldwide, although the device is not available in the Middle East yet.

The second generation of Apple's iPhone, which features 3G connectivity, GPS and increased memory capacity, could make Apple as much as $1 billion from initial sales, according to market research company iSuppli.

The launch of the phone was accompanied with the launch of the App Store, Apple's online store for iPhone applications, which features over five hundred applications.

iSuppli believes that the initial sales period will see between one and two million handsets sold, which would give Apple over $1 billion. While the phone itself has a recommended retail price of $199 for the 8GB model and $299 for the 16GB model, Apple receives the sales price plus an additional $300 per phone from its exclusive US partner AT&T. Apple forecasts that it will sell ten million units of the iPhone 3G by the end of the year.

While fans started queuing to buy the phone one week ahead of the global launch, the launch did not go entirely smoothly as sheer weight of demand crashed activation servers. Would-be buyers had to wait for anywhere up to three and half hours to for stores to activate their new handsets, with Apple partner 02 closing some stores in the UK three hours early as staff were not sure they would be able to activate all customers.

The problem was also made worse as existing iPhone customers attempted to download the 2.0 firmware update, with some users reporting phones that were rendered useless because of incomplete downloads.

The iPhone 3G is due for launch in Egypt, Qatar and Jordan some time later this year.