Apple 3G iPhone Countdown Is On

The latest versions of Apple's iPhone aren't available yet, but there are early signs a buying hysteria is gathering force -- already user interest has caused two iPhone sites to crash, in the U.K. and New Zealand.

Consumers began camping out at Apple stores earlier this week including a long line outside Apple's 5th Street location in Manhattan. AT&T is planning to open many of its U.S. stores at 8 a.m. Friday to get a jump on the expected surge in orders.

The iPhone 3G hype has already caused a commotion online. O2's site was overwhelmed on Monday, causing the service provider to shut down much of its order-taking capabilities. Would-be purchasers were told to hold off until Friday. Vodafone New Zealand shut down its site Tuesday after the site was flooded with inquiries. Callers were told to wait until Friday, which, incidentally, will represent the first worldwide located to sell the iconic phone.

Some users are avoiding the iPhone 3G rush by purchasing used first generation 8GB and 16GB iPhones on eBay. Prices range from $300 to nearly $600. The eBay phones advertised are usually unlocked -- "jailbroken" in iPhone parlance -- and can be used with any GSM network like AT&T and T-Mobile in the U.S. The unlocked phones enable users to avoid the onerous two-year contracts that AT&T requires.

A typical posting advertising a used iPhone phone reads: "This iPhone is UNLOCKED!!! This means it can be used with any GSM provider... insert your SIM card and you are in business. This iPhone is also Jailbroken and has Installer (for third party applications.)"

Despite the lure of the first generation iPhone, the second generation with wireless broadband speeds has customers already talking. AT&T is offering the 8GB and 16GB iPhone 3G models for $199 and $299, respectively, with two year contracts. AT&T customers who already have earlier iPhones can upgrade to a 3G model for $399 for the 8GB version and $499 for the 16GB version; the upgrades also require a two-year contract.

The new iPhone models are equipped to take advantage of AT&T's new high-speed network, but the status -- and reach -- of the network won't be completely known until users actually begin using their new phones. The existing iPhones use the relatively slow EDGE network, but can link to broadband Wi-Fi where Wi-Fi hotspots can be found.