"IPhone 3G had a stunning opening weekend," said Steve Jobs, Apple's chief executive, in a statement.
But the launch was plagued by software problems. All the new iPhones had to connect to Apple's servers for activation, which quickly overloaded them. Lines of customers built in stores as employees were unable to get the phones working.
Additionally, new software was released for the old iPhone, which required reactivation of those phones. Many owners of the older phone were left with unusable units.
Reports of activation problems subsided over the weekend, as the servers apparently recovered, and buyers were able to activate their phones through their home computers.
In a client note, Morgan Keegan & Co. analyst Tavis McCourt said the launch "was clearly not as smooth as last year's launch" but said demand "was clearly strong across the U.S., with lines persisting at the Apple store in Nashville (Tennessee) at least through Saturday night."
McCourt rates Apple shares "Market Perform."
Meanwhile, thanks to Apple's application store and the many programs that run on the new phone, the iPhone may fundamentally change the way people listen to the radio when they're in their cars or otherwise on the go, says CBS News technology analyst Larry Magid
Two free applications for the iPhone and iPod Touch, and another program that costs only $4.99, make it possible toon the iPhone from anywhere, including a moving car, Magid reports.
Apple had sold about 6 million units of the first-model iPhone since it launched in the U.S. a year ago. The company has set a goal of selling 10 million iPhones by the end of 2008.
Shares of Apple rose $4.83, or 2.8 percent, to $177.57 in morning trading.
Apple also said users of the iPhone and iPod touch had downloaded more than 10 million applications from its new App Store since it went online on Thursday.
Of the store's 800 applications, a quarter are free. Most of the rest cost less than $10. Programs include news browsers, AOL Instant Messenger software, games and Web radio players.