Sleep-deprived Apple fans brave rain for iPhone 4

A video application for the new iPhone 4 is displayed, after Apple CEO Steve Jobs unveiled the new device, during the Apple Worldwide Developers Conference in San Francisco, California, June 7, 2010.

TOKYO/SAN FRANCISCO (Reuters) - Hundreds of fans flocked to stores in Japan to be the first buyers of the iPhone 4 as Apple(AAPL.O) rolls out the red-hot smartphone in five of the world's six largest economies on Thursday.

Sales of the iPhone 4, which boasts a higher-quality screen and longer battery life than the previous model, have blown past expectations, overloading systems and causing Apple and carriers to halt taking pre-orders as supplies run out.

In Japan, where the gadget was launched before other countries due to the time difference, fans dressed up like iPhones and painted iPhones on their faces.

"I can't stop smiling," said Noboru Takahashi, a musician who had waited in line since Monday at Softbank's (9984.T) flagship store in a posh Tokyo shopping district. He was the first in a queue of more than 320 people.

The iPhone has been a huge success since it debuted in 2007, boosting Apple's margins and transforming it into one of the world's leading mobile device makers.

However, the supply shortage, which an analyst said was worsened by a lack of LCD panels, could cap initial sales and hurt Apple when it faces a slew of new competitors, namely high-powered handsets based on Google Inc's Android software.

"The Droids are coming and current demand for the iPhone 4 implies a titanic battle between Apple and Google is imminent," industry tracker comScore said in a statement.

Apple has announced sales of more than 600,000 iPhone 4s, a record for just a single day of pre-orders last week, meaning it sold seven of them per second.

The iPhone is Apple's main growth driver, and is expected to soon become its biggest source of revenue as the company expands the smartphone around the globe. Some analysts estimate more than two-thirds of iPhone sales now come from overseas.

Graphic on specifications, click r.reuters.com/xap73m

Graphic on iPhone sales, click r.reuters.com/tym68k

The device, which also offers video chat via WiFi, and a gyroscope sensor for improved gaming, comes less than a month after Apple's iPad went on sale outside the United States and has beaten sales expectations.

The iPhone 4 debuts in the United States, France, Germany and the UK later on Thursday.

At Softbank's flagship store in Tokyo, there was only enough inventory for non-reserved customers who had lined up by the day before the launch. The price starts at 46,080 yen ($512) in Japan, but customers can get one for free in real terms if they sign up for certain services.

Takahashi and many others in the queue were using the Ustream online broadcasting service and Twitter microblogs to report on their movements and solicit camping gear and supplies, including umbrellas, as they waited through humidity and rain.

Ayaka Sato, a 22-year-old worker at an IT firm, who broadcast herself through Ustream, described iPhone 4's front camera as the most attractive new feature of the phone.

"It was kind of hard to take videos of myself like this," she said, holding her iPhone backward. "I am so looking forward to using the front camera."

WAITING IN SLEEPING BAGS

In the United States, the more avid of the Apple faithful have already begun lining up, a day before the launch.

Roughly 20 people waited patiently in a bedraggled line amid sleeping bags, pillows and a neon-colored inflatable couch outside an Apple store in San Francisco on a windy Wednesday.

One fan with a blue sleeping bag who gave his details only as Imran, 25, said two people had approached him about buying his spot in line.

"I haven't slept in 30 hours," said Joseph Lobato, 31, sitting alongside cardboard signs that read "Oil sucks" and "More bike lanes."

"I'm in line to replace the first generation [iPhone] that I ridiculously stood in line for the first time, and am ridiculously standing in line for again," he added.

The forlorn group belied the excitement that has raged online the past week. On eBay, iPhone 4s had been going for thousands of dollars apiece, with one enterprising seller offering a black iPhone 4 at an exorbitant $15,000.

For the current quarter, which ends June 26, analysts roughly expect Apple to sell 8-9 million iPhones in total, which includes sales of older generation models. Analysts expect Apple to ship 10 million or more a quarter, as output ramps up to meet demand.

Apple unveiled the slimmer iPhone 4 earlier this month, kicking off its fastest-ever global product roll-out.

BGC analyst Colin Gillis expects Apple to set a new record for being the first company to sell a million smartphones in a single day. But he warned that production snags might dampen supply and hurt initial sales.

"It is very possible that the iPhone encounters production issues -- a normal occurrence as a cutting-edge collection of technologies goes into scaled production," he wrote. "This could create a situation where demand is greater than supply --limiting the number of iPhone 4 phones sold."

The latest phone would be available in 18 countries in July and 88 by September in the quickest-ever international roll-out for an iPhone, Apple had said when it unveiled the iPhone 4.

(Additional reporting by Edwin Chan in Los Angeles, Georgina

Prodhan in London, Nathan Layne in Tokyo, Tarmo Virki in Helsinki

and Gabriel Madway in San Francisco; Editing by Anshuman Daga)

(For more business news on Reuters India click in.reuters.com)