Software compatibility problems marred the launch of the iPhone 3G at Apple's flagship store in London, where customers had difficulty activating their new phones.

Apple has an exclusive deal with network operator O2 in the U.K. - but O2's web-based activation system requires the use of Microsoft's Internet Explorer browser to register a new phone: It won't work with the Safari browser bundled in Apple's Mac OS X.

In its Regent Street store, Apple had installed VMware Fusion desktop virtualisation software on some of its Macintosh computers, allowing them to run Internet Explorer on Windows, but the activation process was still not working.

"It just goes dead," said would-be customer Mark Phipps, who left the store frustrated and without an iPhone 3G.

"They wouldn't reserve us one, which is a real kick in the teeth," he said.

Phipps is one of at least three customers that left the store disappointed by the delays.

Another, Josh Young, said the activation process was completely broken. He planned to return later.

The short line that had formed outside the store by the time it opened at 8am quickly moved inside, but two hours later the line had lengthened and extended out onto the street again.

Further details were hard to come by: Store staff would not allow journalists inside the building.

But speaking to Techworld, an O2 spokesman insisted that the problem was not with Apple's systems, but with O2's back end system.

"We are experiencing some technical difficulty with our systems which is impacting Apple stores," confirmed the spokesman. "The systems are working, but are working slowly."

"The systems at O2 and Carphone Warehouse are working normally, and indeed we are selling 40 iPhones an hour in the O2 Oxford Street store."

The spokesman was unable to say whether O2's web activation system only worked with Internet Explorer, and not Safari.

"The fault with our back end system was partly due to high level of traffic that hit the systems today. It is nothing to with the front end systems in Apple stores," he insisted.

The launch went more smoothly in Japan, where the iPhone went on sale for the first time. The first new iPhone owner emerged from the store of Apple's local partner, Softbank, within 20 minutes of the launch.