Most iPhone owners gush but some have glitches

SAN FRANCISCO, July 1 (Reuters) Proud owners of Apple Inc.'s iPhone raved about their first day with the device on Saturday, but a glitch took the shine off the year's most anticipated device for a few unlucky customers.

Of 11 iPhone owners contacted by Reuters on Saturday, nine reported little or no trouble setting up their handsets, a combined cell phone, music player and Web browser.

''It's awesome, it's the best thing I ever saw in my life,'' said New York private detective Jerry Gregory. ''Once people see this phone they are going to want one. Everybody I show this phone wants one, even people who were anti-iPhone.'' But Brad Bargman of Ft. Lauderdale, Florida, who waited in line 9 hours on Friday to buy his phone, said excitement turned to dismay when the device stubbornly refused to activate, meaning it can't be used.

''It's a real buzz kill,'' said Bargman, adding that repeated calls to AT&T failed to get the device to work. ''Now I'm soured on it a little bit.'' David Clayman, the third person in line at Apple's flagship Manhattan store, said he was still unable to activate his iPhone a day later, probably because he couldn't update the Apple software on his computer needed to start the process The iPhone, which costs 0 or 0 depending on memory capacity, is activated through a process handled by AT&T Inc., the phone's exclusive carrier for two years, in Apple's iTunes online music store.

In a sign of strong initial demand, AT&T said it had sold almost all its phones within hours of the device going on sale at its 1,800 stores. The company did not say how many units it had sold.

Asked about problems some buyers were having, AT&T spokesman Mark Siegel said the ''vast majority'' of customers were able to use their phones within minutes.

''There are some whose activation process is being delayed and that's something that can happen in a launch like this and we're resolving those on a case-by-case basis,'' Siegel said.

Apple spokeswoman Jennifer Bowcock declined to comment on the number of iPhones sold at its 162 outlets, saying only: ''So far we've seen a lot of excitement and buzz.'' Apple aims to sell 10 million units in 2008, giving it 1 percent of the global mobile phone market. The company is banking that the iPhone will become its third pillar product alongside its popular iPod music players and Mac computers.

By mid-afternoon on Saturday, Apple's store in downtown San Francisco was crowded with shoppers interested in the iPhone display. The store was sold out of the 0 models and about 10 0 models were visible on shelves.

Indeed, the iPhone's inclusion of so many features into a sleek package triggered a sort of nerd rapture among enthralled gadget freaks.

''It's not like it's a computer, it's not like it's a phone, it's like a living sculpture in my hands,'' said Dale Larson, a mobile business consultant in San Francisco.

Buyers cited the large screen, full-blown Internet browser, ability to play music and video, and camera quality as among the phone's best features.

Two of the top concerns raised prior to the phone's launch -- the on-screen keyboard and quality of AT&T's network -- were annoying to some people, but no one said they regretted buying the device.

''At first I tried to use my thumbs to type but it didn't work so well. But if I use my finger it's okay,'' said software developer Tim Brown.

Reuters KK VP0550