Shoppers may have taken home as many as 700,000 iPhones over the weekend, emptying out outlets in 10 states including Hawaii. AP photo/Apple Inc.

Buyers emptied outlets in 10 states, with 95 of 164 stores reporting sellouts last night, according to Apple's Web site. Cupertino, Calif.-based Apple started selling two models of the iPhone, priced at $499 and $599, this past Friday.

Shoppers may have taken home as many as 700,000 iPhones over the weekend, Goldman Sachs Group Inc. analyst David Bailey has estimated, twice his initial projection. Chief Executive Officer Steve Jobs has sought to use the connection to the iPod business, which pulls in about $10 billion in revenue a year, to reach his goal of selling 10 million phones in 2008.

Apple's stores in Hawai'i, Michigan, Minnesota, Nebraska, Nevada, New Hampshire, Oklahoma, Rhode Island, Utah and Washington sold off their allotment of phones yesterday, leaving buyers to check with AT&T Inc. Apple lists whether stores are out on its Web site.

AT&T sold out of the phone in almost all its 1,800 stores, with "just a handful" of locations keeping the handset in stock, spokesman Mark Siegel said in an interview today. San Antonio-based AT&T is the exclusive wireless service provider for the device. iPhone users need to sign up for a two-year contract.

Apple sells the iPhone for more than double its manufacturing costs, with profit margins of more than 55 percent excluding logistics and royalties, industry researcher ISuppli Corp. said in a report today. Apple spokesman Steve Dowling didn't immediately return a call seeking comment.

SHARES OF APPLE UP

Shares of Apple rose $5.91, or 4.9 percent, to $127.17 at 1 p.m. New York time in Nasdaq Stock Market trading. The gain was the biggest since Jobs unveiled the iPhone on Jan. 9. AT&T shares fell 35 cents to $41.50 on the New York Stock Exchange.

U.S. stock markets ended trading at 1 p.m. New York time today, and are closed tomorrow for the Independence Day holiday.

There's a two- to four-week wait for customers who order online from Apple. The phone sold over the Internet for a premium through online auction service eBay Inc., with an average price of $705 and the highest at $12,500. People have sold about 4,500 iPhones through eBay since the debut.

The iPhone broke AT&T's opening-weekend records, selling more in three days than phones such as Motorola Inc.'s Razr did in their first month, according to spokesman Michael Coe. Siegel declined to give specific sales figures for any of the devices.

While the first iPhone sales will be counted in second-quarter results, they will benefit AT&T in the third quarter as enthusiasm spreads for the gadget, said Todd Rosenbluth, an analyst at Standard & Poor's in New York.

ENTHUSIASM OVER iPHONE SPREADS

"The initial buyers brought it home, and now they're talking about it, showing it to friends," said Rosenbluth, who has a "hold" rating on AT&T shares.

Analysts don't expect the iPhone to have a significant effect on sales this year or next because Apple plans to recognize revenue from the devices over two years, rather than in the quarter they're sold. Apple, whose third quarter ended June 30, will report results this month.

AT&T's Edge data network, which allows the iPhone and other devices to access the Internet, crashed for several hours yesterday in a "very limited" outage, Siegel also said today.