Only a few people turned up to buy an iPhone 3G S from Apple's flagship store on London Regents Street this morning.

A security guard told iPod User's Andy Penfold: "A handful of people were queuing outside at about 5.30am. They were served quite quickly at 8am. There has been no queuing since."

The security guard predicted that their may be a rush at lunch time as office workers make their way to the store to purchase the new iPhone 3G S, and indeed Apple Store staff were much busier fielding iPhone questions by 11:30.

At the O2 store on London's Oxford Street, demand is more steady – there is currently a 45-minute wait and the only customers being allowed into the store are those who are buying a new iPhone. Most people appear to be new to the iPhone, as opposed to paying for an upgrade.

Charlie Bennett, a digital matte painter, joined the queue at around 11:15. "I haven't had an iPhone before - I've waited for a better model with all the bugs fixed. And the price is now more within my reach and I can justify it to my missus."

Another punter in the queue, Ben Butterfield, who works in recruitment, had also held off from buying an iPhone until now. "I didn't get the first one because it had no 3G. Then when the next one came out I was in a contract, but that has expired at about the same time that the 3G S was released, so I'm going to get the latest one."

He says he's been using an LG Viewty in the interim. "I've got most of the features in the phone I have now, but it just does them a lot worse."

However, there are people buying out of their contracts to get the latest iPhone 3G S. Dean Duncan, broadband specialist at Carphone Warehouse Oxford Street, said: "One guy paid £180 to pay off his current iPhone contract".

Marwa Hassan, a technology consultant and another member of the queue at the O2 store Oxford Street, was also upgrading the iPhone 3G. "I'm doing it as a new contract so I think it works out at £173," she said, adding that she only baulks at the price when comparing it to US prices. "I need it... well I don't need it but I want it," she said. "I didn't get the first one because I needed 3G."

Over the road at the Carphone Warehouse on Oxford Street, there are more staff than customers. Indeed, Carphone Warehouse staff on cigarette breaks could be seen attempting to poach customers from the O2 queue on the other side of the road. We witnessed one cry of "We got one!", as a customer was persuaded to buy his iPhone over the road without a wait.