Live blog: iPhone 4 goes on sale

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It’s finally here. The much-anticipated iPhone 4 is hitting store shelves on Thursday at 7 a.m. local time in each time zone where it’s available.

CNET has teams of reporters covering the launch in New York City and San Francisco. Marguerite Reardon and Caroline McCarthy will be heading up coverage in New York, while Erica Ogg, Josh Lowensohn, and James Martin will be keeping tabs on what’s happening out west.

These reporters will be checking in at Apple stores and other locations, such as Best Buy, Wal-Mart, and Radio Shack, where iPhone 4s will be sold starting on Thursday. CNET will also let you know how things are going at the AT&T stores where only customers who preordered phones will be able to pick them up. Anyone looking to buy an iPhone off-the-shelf from AT&T will have to wait until Tuesday.

AT&T says that demand for the iPhone 4 is 10 times what it was for last year’s iPhone 3GS. And Apple says it took 600,000 preorders for the new phone through its sales channels.

If history is any indication of what to expect, initial sales of the iPhone 4 are likely to be big. Apple sold more than 1 million iPhone 3GS smartphones the first three days it was on sale. The original iPhone sold about 270,000 units during its first weekend in June 2007, while the iPhone 3G sold around 1 million when it launched in July 2008.

While there’s little doubt that the lines will long, the big question is whether AT&T’s activation system will be able to hold up under the pressure. If the preorder process is any indication of what to expect, iPhone fans may need to be patient. On June 15, thousands of customers trying to preorder the iPhone were met with error messages on AT&T’s and Apple’s Web sites. AT&T’s servers were overwhelmed and the company ended up suspending preorders.

To keep up with the latest news from the launch, stay tuned to CNET’s updates all day.

McCarthy, 6:24 a.m. EDT at the 14th Street Apple Store: About 150 people are in the preorder line for iPhone 4. The line for non-reserved phones is significantly longer. They’re telling new arrivals to get in one big line, and then if people have proof of preorder, they sort them into the preorder line.

Reardon, 6:30 a.m. EDT at the Fifth Avenue Apple Store: The lines for the iPhone 4 are wrapped around the block at Apple’s flagship store on Fifth Ave. The line for the customers who haven’t reserved an iPhone wind down 58th Street and around the block to 59th Street next to the Apple Store. There’s also a huge line of people already lined up in the reserved line. These are customers who have reserved their phones in advance and are just waiting to pick them up.

While it’s clear the crowds are bigger to get the phone, the hoopla and the party atmosphere from previous iPhone launches seems to be missing. With a half hour to go, no one is chanting yet.

McCarthy, 6:41 a.m. EDT: The line stretches all the way from the corner of 14th St. and 9th Ave. down to 10th Ave. (Google Maps should be able to tell you how long this is) and then up around 10th Ave. past the intersection of 15th St. almost to 16th St., but after the corner of 14th and 10th there are gaps in the line because of driveways, a gas station, etc.

Employees of the Apple Store are wearing blue iPad T shirts–no special shirts for this launch.

McCarthy, 6:44 a.m. EDT: First preorder: Been here since 10:15 p.m. EDT last night, originally had a 3G and lost it> He’s a textbook editor for McGraw-Hill, and his name is Zach (26). He was about 42nd in line before they divided it into preorder and non-preorder. First people to show up who didn’t preorder the phone got to the store at 3 p.m. EDT yesterday.

Zach says he took the day off work, and got his boss’ approval. He is not playing hooky.

Reardon, 6:50 a.m. EDT: The doors open in 10 minutes. People in the back of the line only got here about 20 minutes ago. Jose Marinez, 36, said he has stood in line every year since 2007 to get an iPhone. He isn’t worried that Apple will run out of phones, but he is a little worried that AT&T’s servers might crash again. He tried to preorder the phone on June 15 and gave up when he couldn’t get through on the Web site.

McCarthy, 6:58 a.m. EDT: Apple Store employees starting to cheer to rev people up.

McCarthy, 7:01 a.m. EDT: Preorders are being let in, 60 people at a time. It’s going smoothly so far. Afew minutes later, the first batch of walk-ups (non-preorders) are let into store, but ushered downstairs rather than into the upstairs area. Only about 20 let in.

McCarthy, 7:10 a.m. EDT: It’s been 10 minutes and the first guy in line has not yet come back out–AT&T activation. Apple Store employee talking to people who show up and wonder how long the wait will be: “The demand is tremendous. It seems like everybody in New York wants this phone.”

McCarthy, 7:11 a.m. EDT: First customer walks out with phone.

McCarthy, 7:17 a.m. EDT: This is going to be a long day for some of these people: there are still hundreds of people in the preorder line–still only one group of 60 has been let in–and the walk-up line is still much much longer. Line going SLOW.

An Apple Store employee tells me that they do not yet know when the store will be open to “regular” customers for non-iPhone purchases.

McCarthy, 7:25 a.m. EDT: Activation time in-store appears to be 10-15 minutes. But the line itself is very slow. A lot of people who may have expected to get to work on time might not.

Lots of reps from companies that resell used iPhones, or organizations that donate them to developing countries, are soliciting people in line.

The line for walk-ups is now all the way to corner of 16th St.–and keeps growing.

Reardon, 7:30 a.m. EDT: People have been filing into the Fifth Ave. store for about a half-hour now. The line for people who have reserved iPhones is moving quickly. But the line for people who have not preordered a phone keeps growing. It now ends near the corner of 59th St. and Fifth Ave.–people enter the Apple store on 58th and Fifth Ave.

Reardon, 7:40 a.m. EDT: I just overheard an Apple representative say that everyone standing in line right now without a reservation will likely get a phone. He thinks the line should take two hours to get through.

McCarthy, 7:51 a.m. EDT, en route in Manhattan: The RadioShack on 14th St. and 7th Ave. is opening at its usual 9 a.m. time, no one waiting in front, no ads for iPhone 4 in window (in fact, there’s still a 3GS poster).

McCarthy, 8:18 a.m. EDT at RadioShack in Brooklyn Heights: Across the East River in Brooklyn Heights, about 15 people are clustered in front of the RadioShack on Montague St. It’s opening at its regular hour of 9 a.m. The people waiting are a mix of preorders and walk-ups.

There are no Apple Stores in Brooklyn, FYI.

McCarthy, 8:32 a.m. EDT: A RadioShack employee just arrived at the Brooklyn Heights store. The line is not getting much longer. The first guy has been here since 5:30 a.m. EDT.

The 15th person in line is a girl who says her boyfriend is in line at the 14th St. Apple Store. He preordered a phone there and says even the preorder line is moving at a snail’s pace; she, meanwhile, preordered at the Montague St. RadioShack: “I’ll probably be back in bed before he even gets to the front of the line.”

She said the two of them waited in line for the original iPhone together but that she’s “over that.”

That said, people at RadioShack know they’re taking a gamble because they’ve heard the store may have as few as 10 phones in stock.

Reardon, 8:36 a.m. EDT: I just spent some time inside the Fifth Ave. Apple store with CNET TV’s camera crew. Unlike with previous iPhone launches, the activation process is going pretty smoothly–customers are in and out within 25 minutes. No one I talked to reported any problems. Customers with preorders were allowed in the store first. And by 8:00 a.m. the store was letting in people without preorders. But the line outside for non-preorder customers doesn’t look to have moved much yet.

McCarthy, 8:36 a.m. EDT: A RadioShack employee comes out of the store and says they don’t have as many phones as they’d hoped. Even though the store technically isn’t open yet, he’s letting the people who preordered phones come in one by one.

McCarthy, 8:43 a.m. EDT: If people who preordered the phone aren’t in line right now, it’ll be first come, first serve. Only 4 each of the 16GB and 32GB models are in stock. Guy at RadioShack has a list and if people’s names aren’t near the top of it, they don’t get a phone now. The line breaks up once people learn they won’t get one.

Reardon, 8:52 a.m. EDT: It’s a good thing that Apple is offering a tutorial at one of the tables for people to show them how to use the features on their new phones. Some customers were having trouble getting the FaceTime app to work. Two guys who had come to the store together to get their iPhones were eager to show off the new FaceTime video chat application. But at first, neither one was able to figure out how to launch the chat. Once they realized that they initiated the video call by clicking on the FaceTime button in their contacts, the application wasn’t working for one of the guys. Even though FaceTime video calls are made only over a Wi-Fi connection, users still need to have a 3G connection to initiate the call.

And unfortunately for these friends, one of their phones wasn’t getting 3G cellular signal from AT&T in the Apple store.

McCarthy, 9:00 a.m. EDT: The people waiting in line at the Brooklyn Heights RadioShack had a definitive answer as to whether they’d be getting an iPhone today before the store had even opened for business. Most, unfortunately, walked away empty-handed.

Reardon, 9:06 a.m. EDT: The line at the Fifth Ave. Apple Store for customers who did not preorder an iPhone 4 is starting to go down. It is still wrapped around the block, but it’s not to the corner anymore.

Reardon, 9:45 a.m. EDT at the Best Buy on 62nd Street and Broadway: 9:45 a.m. I was just informed by a sales manager that Best Buy stores in Manhattan and possibly throughout the country will only be selling preordered iPhone 4s. He said he doesn’t expect Best Buy stores in New York City to have iPhone 4s in stock until next week at the earliest, or the first week of July.

Ogg, 6:49 a.m. PDT at the Stockton Street Apple Store in San Francisco: The reservations line is a third longer than the walk-in line, stretching around the corner two city blocks. While a few camped out overnight, the crowd mostly began forming around 4:30 a.m. PDT today. As usual, there are people passing out coffee and donuts to the eager iPhone buyers gathered here.

Ogg, 6:55 a.m. PDT: An update on the early entrepreneurs we wrote about on Tuesday: Chris Bank, the first man in line Tuesday, who was selling his spot for $200, actually handed it off for $400. The taker was Joe Sabia of San Francisco, who saw the story on CNET and decided to buy the spot and do it for “just a really fun story.” This will be his first iPhone.

Joe Lobato, who was trying to trade his spot for a new iPhone, because he couldn’t afford it, found a family of three to buy two phones–one for him, one for them. So at least a couple of the early entrepreneurs here were successful.

Reardon, 9:56 a.m. EDT: I just checked with my colleague Erica Ogg, who covers Apple. She said that some Best Buy stores are only selling preorder phones, while others will have phones in stock for people coming to buy them off the street. I guess the best bet is to call your local Best Buy store in advance to find out if they have them. According to the manager at a Best Buy store in Manhattan, all stores in the New York City district will only be selling preorders today.

Ogg, 6:58 a.m. PDT: The store is about to open, camera crews are crowding the entrance. No chanting by employees–yet. Then, as the Apple employees come down the stairs to form a receiving line inside the store, those waiting in line start to cheer.

Ogg, 7:02 a.m. PDT: The countdown from employees begins…and the doors open at two minutes after 7 a.m. The first people with reservations start pouring into the San Francisco store. So far everything seems fairly orderly. Only those who reserved have been let in so far. The people who made purchases appear to be waiting patiently.

Lowensohn, 7:07 a.m. PDT at the Apple Store in Palo Alto: The line here was considerably longer than that for the iPad. The guys at the front of the line had, like many others, spent the night in front of the store, though they only got there at 10:30 a.m. the day before.

Ogg, 7:11 a.m. PDT: In San Francisco, the first buyers emerge, all smiles, and of course, to the proverbial pop of flash bulbs.

Reardon, 10:14 a.m. EDT: Here is some more detail on the Best Buy inventory. According to an FAQ that Best Buy has put on its Web site, only stores that have more inventory than the preorders will be selling the iPhone on launch day (that is, today). Since preorders have been so high, Best Buy’s Web site says it’s unlikely that many stores will have enough inventory to sell iPhone 4s to walk-in customers.

Another tidbit to keep in mind is that just because you’ve preordered a phone with Best Buy doesn’t guarantee that you will be able to pick up that phone today. Unlike Apple, which has said that it will have enough iPhone 4s available on launch day for everyone who preordered the devices, Best Buy says on its Web site that even preorders are first come, first served.

From the FAQ: “If I pre-ordered the iPhone 4 at Best Buy, will I get it on launch day, June 24th, 2010? — This is not guaranteed and is completely dependent on how many the store receives from Apple. Any inventory received will be used to fulfill outstanding preorders in the order they were placed. For example, if the store has twenty preorders on launch day but only received fifteen phones from Apple, then the first fifteen preorders should receive their phone on launch day.”

Best Buy says that customers who preordered iPhone 4s, but did not get their phones on launch day, will get them when the next shipment of phones comes in from Apple.

Ogg, 7:17 a.m. PDT: After about 15 minutes, the first walk-in buyers are allowed to enter the store. Sabia, who paid $400 and slept one night on the sidewalk, gets a cheer from some of his fellow waiters-in-line.

Bank, who slept outside this store since Tuesday, gets a cheer from Apple employees, who he’s clearly befriended, as he enters the store to make his purchase.

Ogg, 7:27 a.m. PDT: Just as at the iPad launch here a few months ago, Apple’s chief designer, Jonathan Ive, emerges from the Stockton Street store quietly, nodding politely at the few fans who recognize him.

Ogg, 7:36 a.m. PDT: After a half-hour, only two walk-in customers have been let inside. Looks like it’s going to take a lot of patience for people who did not have a reservation.

Ogg, 7:59 a.m. PDT: The first walk-in buyer here in San Francisco, Joe Sabia, emerges with his iPhone. He decided to not sign an AT&T contract, so he paid full price for the phone. “That way if it goes to Verizon in the next few months, I can use it there.”

Lowensohn, 8:04 a.m. PDT: Both lines here in Palo Alto continue to grow. The walk-in line has now stretched around the block. Likewise, the line for those who have preordered is around the same size as it was for iPad walk-ins back in April.

CNET ran into brothers Christopher and James Nicholson, who camped out overnight here. Christopher explained that he had done the same when the Palo Alto store first opened, but that it was his brother’s first time doing so. Another first for James was the latest iPhone–he had not owned any of the previous iterations. The two brought a cooler, as well as a pillows and blankets. “I was kind of bummed [Robert] Scoble wasn’t here,” said Christopher. “When I was here for the iPad launch, that guy was a lot of fun.”

Lowensohn, 8:48 a.m. PDT: People with reservations who got here at 6:30 this morning are just now getting their handsets. On the walk-in line, it’s still going to the folks who camped overnight.

Also overheard two employees saying the store was expecting a midmorning stock delivery. Though from the looks of what they have on the floor, there’s a ton of stock.

Lowensohn, 9:01 a.m. PDT: Apple appears to be selling a ton of bumpers–a casing for the sides of the iPhone 4. Almost everyone I’ve seen walking out without a bag seems to have bought one. And most are black.

Reardon, 12:30 p.m. EDT at the Apple Store on Broadway and 67th Street: I’m now on the Upper West Side of Manhattan. The store here is only serving preorder customers right now. Walk-ins who got i line early this morning are still being served. But Apple has since cut the line off. Patrick van Rosendaal, 34, who lives on the Upper East Side got in line here at 6:30 a.m. He was just going into the store around 12:15 p.m. He and everyone else in the walk-up line will have to get the 16GB black version of the iPhone 4. This store ran out of 32GB devices around 10 a.m., people standing in line said.

“Normally, I would have waited,” Rosendaal said. He’s had every version of the iPhone that has come out since 2007. Every year he has upgraded to the new version, but he’s never waited in line at a store. After about six hours of waiting he said he doubts he’ll ever do it again.

Reardon, 12:42 p.m. EDT: Apple sales representatives are telling people who are coming up to the line that they need a reservation at this point to get an iPhone 4. The line has gotten much shorter in the past half-hour. Customers who have preordered phones for this location have until 10 p.m. tonight to pick up their phones. If they don’t show up, they will forfeit their reservation and the phone will be released for sale to walk-in customers starting tomorrow morning. Apple employees said they weren’t sure if this location will get a new order of phones tomorrow. But they expect a line to form early in the morning to pick up any phones that weren’t claimed today.

McCarthy, 1:45 p.m. EDT: A friend I bumped into when I showed up at the 14th St. Apple store in NYC at 6:15 a.m. is still in line.

Lowensohn, 10:56 a.m. PDT: The lines here in Palo Alto are still going, but the one for walk-ins is now considerably shorter than earlier in the day. The rain has given way to warm and sunny weather, which prompted iPhone advertising and analytics company Mobclix to park a large Ben & Jerry’s ice cream truck next to the line. At this point it’s safe to say anyone who’s spent more than a few hours in line will have had enough sugar to put down an elephant.

Linegoers did get another treat in the form of a FedEx and UPS truck both pulling up across the street from the store and unloading piles of brown boxes, though the Apple employees who were unloading them were quick to point out that they were not additional iPhone units. CNET later confirmed that many of the boxes contained iPad models with 3G antennas. But the truck’s arrival does explain the earlier rumors of a delivery on its way.

Reardon, 2 p.m. EDT: At the AT&T store at 95th and Broadway. It looks like preordering the phone and picking it up from an AT&T store may have been the best bet for customers looking to get an iPhone 4 on launch day with no hassles or long lines. I just checked out an AT&T store on the Upper West Side of Manhattan. There was no line in the store, and a sales representative said that no significant line had formed at any point of the day. Customers came into the store at their leisure to pick up their preordered phones today.

“There were a few people in line early at 7 a.m.,” he said. “But most people were able to just walk in and pick up their new phones.” Even customers who hadn’t expected to get their phone delivered today were able to get their iPhone, he added.

AT&T informed customers earlier this week that the company would only sell preordered phones at its retail locations on launch day. It will begin selling the phones to people who were not able to preorder starting Tuesday, June 29. The sales representative said he expects the store to have plenty of phones in stock for the release on Tuesday, but he urges customers to get in line early. The store opens at 7 a.m.

Lowensohn, 11:40 a.m. PDT: Here at the Apple store in Palo Alto, people without reservations now have to wait 4 to 5 hours, while people with reservations have to wait approximately 3 hours. The line for people with reservations is also approximately five times the size of the walk-in line, but it’s moving faster.

Folks with reservations have until 9 p.m. to get in line and be guaranteed a phone today.

Lowensohn, 1:14 p.m. PDT: Just a quick update from the Palo Alto store, where the people currently at the front of the reservation line have now been waiting for 7 hours to get their phones.