Apple sold up to 525,000 iPhones at its stores and AT&T's in the first weekend since the device launched on Friday, the Los Angeles Times has reported.
Half of Apple's stores on the US west coast sold out on the first day, said other media outlets, citing San Francisco's Global Equities Research.
According to AT&T, provider of wireless services for the iPhone, most of its 1,800 stories sold out within 24 hours.
The phone, on sale in Europe this year, has a web browser and media player.
Apple boss Steve Jobs has said the iPhone will become Apple's third main business after the iPod music player and Mac computer, which generate $10bn in annual sales each.
Apple said it hoped to sell 10 million iPhones by 2008 and grab a 1% share of the mobile phone market.
According to Apple's website, there is already a two to four week waiting list to order the phone online.
The quad-band phone has a 3.5in (9cm) touch screen, wi-fi, no keyboard, a camera and a web browser on board.
It is intended to be used as a media player to listen to music and watch video uploaded to it via iTunes.
It is available in two versions, having either four or eight gigabytes of memory.
Apple said the iPhone's battery would give eight hours of talk time, six hours of web use or seven hours of video watching.
Some fans had been queuing for days
The device costs either $499 or $599 and buyers must also commit to a two-year contract with AT&T that will cost them a minimum of $59.99 per month.
As with many Apple products, prices in Europe are likely to be higher than direct currency conversions from the US dollar would suggest.
The iPhone is due to debut in Europe in late 2007 and in Asia in 2008.
Apple's shares dipped in early trade in New York as investors reacted to separate reports that recording giant Universal Music Group has refused to renew a deal with Apple's iTunes Music Store that guarantees the online music seller exclusive access to all Universal content.
This could put in jeopardy the range of artists on offer at iTunes, which provides music to be played on the iPod and iPhone.
Apple said it was still negotiating with Universal, but its shares suffered and ended the trading day 0.64% down at $121.13 in New York.