Apple began selling its iPhone in the US last Friday, with store managers at AT&T retail shops and Apple's own stores greeting crowds.

At the Apple store in the SoHo section of New York, there was a carnival atmosphere throughout the afternoon, which built to a climax with a crowd of hundreds counting down from five, right before 6 pm. In the last hour before doors opened, a man was even heard selling spots close to the front of the line to those who were closest to the back.

Amid cheers, movie director Spike Lee was first to walk into the store, saying he was there for charity. A Brooklyn, New York-based charity called Keep a Child Alive grabbed first place in line earlier in the week, using its position to publicize its plans to auction an iPhone on eBay and use the money for charity.

"They asked me to be a part of it," Lee said. He noted that the charity did the "hard part" waiting in line all week in front of the store, and said he felt lucky to be part of the effort.

Actress Whoopi Goldberg was second in line. When asked what she was doing there, she commented on the media crowding around her, saying "I don't really know at this point." When asked whether she was going to buy a phone, she said yes.

About ten minutes before the doors opened, an Apple employee came out with instructions and tips for the crowd. He said people could buy up to two phones each, and encouraged people to buy iPhones before shopping for accessories.

By morning the line outside the SoHo store stretched for three blocks. Some enthusiasts were napping in folding chairs while others talked on the phone or to each other as they waited. Temperatures had dipped nearly 20 degrees Fahrenheit since Tuesday and though the skies threatened rain, the weather provided a more comfortable atmosphere for iPhone enthusiasts than the summer heat that assaulted them earlier in the week.

Bill Mac and Jonathan Bricklin had another way to pass the time - they had a small ping-pong table set up as a way to promote their social networking site, The Naked PingPong club, which encourages people to meet by playing ping-pong.

Mac said he was waiting for the iPhone because it would allow the two to run their business entirely from a phone without needing a PC. "In LA the mobile office is about your car, in New York it's about your phone," he said. Later, Mac took a break from line to visit a local cafe Aroma, where he was overheard on his current phone telling someone about the two-iPhone limit.

Meanwhile, at an AT&T store in downtown Boston, Craig Henry took a sick day from work to gain the second place in a line of 65 people.

"I have a Motorola Q and a BlackBerry, but this lets me get rid of the phones and the iPod," Henry said. "I'll sell the iPod to you if you want."

Apple has prepared for what it calls "iDay" with the company's customary secrecy, sharing few details about the phone's internal workings or how many phones it has manufactured for the launch.

The company has said it wants to sell ten million units worldwide by 2008, but CEO Steve Jobs warned on Friday that he may not have made enough iPhones to meet demand for the launch. In fact, that goal is modest by Apple's own standards; the company sold more than ten million iPods during the first quarter of 2007 alone.

Other factors that could lead to slow sales are consumer wariness about the iPhone's battery life, the utility of its virtual keyboard, and its price. The phone comes in a 4GB model for $499 or 8GB model for $599, and requires a two-year AT&T service plan, ranging from $60 per month to $100 per month.

However, Apple says the iPhone will win converts with its touch-screen interface and combined functionality of a mobile phone, iPod music player and mobile internet browser. The company says those features will differentiate the iPhone from other smartphones.

To handle the expected rush for iPhones, Apple extended the hours in its 164 US retail stores until midnight.