The iPhone will be available in Europe later in 2007 and Asia in 2008.
Since the iPhone was announced at Macworld in January 2007 the gadget has won a huge amount of coverage.
That interest has continued up to the launch with bloggers reporting live from queues outside some stores. Gadget site Gizmodo is broadcasting live video from the Apple store in San Francisco.
The quad-bandphone has a 3.5in (9cm) touch screen, wi-fi, no keyboard, a camera and a web browser on board. It is also 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 sporting either four or eight gigabytes of memory.
The BBC News website puts some iPhone rivals through their paces.
Apple said the iPhone's battery would give eight hours of talktime, six hours of net use or seven hours of video watching.
Early reviews of the iPhone have been broadly positive but those who have played around with it said touch screen typing took some getting used to and data download speeds were very slow.
The handset has also been criticised because it does not use the 3G network, does not support instant messaging or voice-activated dialling and does not let people choose ringtones beyond the 25 pre-installed on it.
Apple said it hoped to sell 10 million iPhones by 2008 and grab itself a 1% share of the mobile phone market.
To do this it will face significant competition from well-established handset makers such as Nokia and other touch screen phone makers such as Samsung and HTC.
The iPhone has been under development for more than two years (Credit: Apple)