"It's such grief and aggravation," said Frederick Smalls, an insurance broker in Whitman, Mass., after spending two hours on the phone with apple and AT&T Inc., trying to get his new iPhone to work.

In stores, people waited at counters to get the phones activated, as lines built behind them. Many of the customers had already camped out for several hours in line to become among the first with the new phone, which updates the one launched a year ago by speeding up Internet access and adding a navigation chip.

A spokesman for AT&T, the exclusive carrier for the iPhone in the U.S., said there was a global problem with Apple's iTunes servers that prevented the phones from being fully activated in-store, as had been planned.

Instead, employees are telling buyers to go home and perform the last step by connecting their phones to their own computers, spokesman Michael Coe said.

However, the itunez servers were equally hard to reach from home, leaving the phones unusable except for emergency calls.

The problem extended to owners of the previous iPhone model. A software update released for that phone on Friday morning required the phone to be reactivated through iTunes.