* Record sales pace expected as Apple pre-orders top 2 mln
* Sales start in Australia with 600 at flagship Sydney store
* High-margin iPhone sales expected to fuel strong quarter
* Apple mapping app, lack of payments chip criticized
By Jane Wardell and Tim Kelly
SYDNEY/TOKYO, Sept 21 (Reuters) - Apple Inc’s iPhone 5 hit stores around the globe on Friday, giving the consumer giant a boost ahead of the crucial end-of-year holiday season as rival Samsung Electronics Co stepped up its legal challenge over key technologies.
The new phone - which was unveiled last week - went on sale across Asia with mobile carriers reporting record demand, leading at least one to question Apple’s supply capacity.
“It’s thin and light. I’ve used Samsung before, but the operation, the feeling, of the iPhone is better,” said Wataru Saito, a semiconductor engineer who had been queuing in Tokyo since mid-afternoon on Thursday with his suitcase, as he had a flight to catch on Friday.
Apple has booked more than 2 million pre-orders for the device in the first 24 hours, double the first-day sales of the previous iPhone 4S.
Masayoshi Son, president of Softbank Corp, one of the two Japanese carriers selling the phone, said he was concerned that Apple does not have enough production capacity to meet demand.
Softbank and Singtel, Singapore’s biggest mobile phone operator, said demand for the iPhone 5 had exceeded previous offerings from Apple, partly because the new phones could work on 4G networks that offered much faster data speeds.
KDDI Corp, the other Japanese carrier offering the iPhone, said that it had already run out of the new phone. Australia’s Telstra Corp Ltd reported online pre-orders sold out in a record 18 hours and said it was discussing bi-weekly restocking with Apple.
Apple’s rival and component supplier, Samsung, moved to crash the party on the eve of the phone’s debut, saying it planned to add the new device to existing patent lawsuits against its U.S. rival.
South Korea’s Samsung and Apple are locked in a patent battle in 10 countries and the stakes are high as the two vie for top spot in the booming smartphone market.
Both companies are also raising marketing spending to promote their latest products ahead of the holiday sales quarter.
An estimated 600 people queued around the block from the Apple store in central Sydney, the first in the world to hand over an iPhone 5 to buyer at 8 a.m. local time (2200 GMT, Thursday). Customers were limited to buying a maximum of two phones.
In Singapore, SingTel had booths open selling accessories and staff on hand to help buyers transfer data from their old phones, while n a rainy Tokyo, the lines stretched back several blocks.
In Hong Kong, whose proximity to China supports a thriving grey market, small groups of people carrying rucksacks filled with cash waited outside the city’s flagship store hoping to snap up phones for resale.
The launches were more tightly controlled by Apple than the release of the iPhone 4S in 2010, resulting in a more subdued atmosphere - most of the noise in Hong Kong came from staff who outnumbered customers and chanted “iPhone 5, iPhone 5”.
Guerrilla marketers grabbed the first dozen or so spots in the queue in Sydney, with companies paying staff members to line up for several days in the hope of being photographed and interviewed for being among the first in the world to get their hands on the new devices.
But most of those waiting were aficionados already hooked on Apple’s earlier iPhones and best-selling iPad tablet computers.
“I feel like if I leave it at home, I go a bit crazy,” James Vohradsky, a 20-year-old student said of his current iPhone. “I have to drive back and get it. I can’t do my normal day without it,” said Vohradsky, who had queued for 17 hours with his younger sister.
Some people turned up simply for the party atmosphere.
“I’m not worried about getting my hands on a phone, I queued up to make new friends, it’s a festival,” said Nobuhiko Hirota outside the Tokyo store, holding a Blackberry mobile phone he says recently bought to collect because he says he expects carriers to soon stop selling them.
Some analysts expect Apple to sell up to 10 million iPhone 5 models in the remaining days of September and JP Morgan estimates the phone release could provide a $3.2 billion boost to the U.S. economy in the fourth quarter.
The new phone has a larger, 4-inch screen and is slimmer and far lighter than the previous model. The iPhone 5 supports faster 4G mobile networks and also comes with a number of software updates, including Apple’s new in-house maps feature.
Repair firm iFixit pried one open in Melbourne to reveal the phone uses chips from Qualcomm, Avago and Skyworks Solutions.
Apple doesn’t disclose which companies make the components that go into its smartphones and teardowns of the latest product give investors a vital glimpse of who has been chosen - or rejected - a development that can sometimes cause drastic swings in stock prices.
Earlier this month, shares of Audience Inc, a small speciality chip maker, plummeted 63 percent after the company said Apple would no longer use its noise filtering technology in the iPhone 5.
But not everyone is impressed with the standard of the new technology. The new maps feature has been criticized by some users for a number of geographical errors, missing information and a lack of features.
Kim Tudo, a student at the University of New South Wales who queued overnight, said he was disappointed the turn-by-turn navigation feature under the iOS 6 mobile operating system behind the new phone was not immediately available in Australia.
Vohradsky said the lack of mobile payment chip was also “a bit of a letdown”. Apple did not embed Near Field Communication (NFC) technology used to turn cellphones into mobile wallets into the iPhone 5.
Tudo and Vohradsky were less bothered by Apple’s decision to drop the wide dock connector used in the company’s gadgets for the best part of a decade in favour of a smaller one, a move that some critics have noted adds to costs for users who will now have to buy an adaptor for speakers or other accessories.
The iPhone is Apple’s highest-margin product and accounts for half of its annual revenue. Apple has said it will make initial deliveries of the iPhone 5 on Friday in the United States and most of the major European markets, such as France, Germany and Britain. The phone then goes on sale on Sept. 28 in 22 other countries.
Apple plans to sell the new phone in 100 countries by the end of the year, ramping up competition in a smartphone market that has already reached a fever pitch. Apple is up against phones that run on Google Inc’s Android software, which has become the most-used mobile operating system in the world, while Samsung has taken the lead in smartphone sales.
Samsung released new ads mocking Apple fans queuing for the new iPhone, showing users favourably comparing the features of Samsung’s top-selling Galaxy S3 smartphone.
Apple co-founder Steve Wozniak, in town for a business forum, was among a crowd of several hundred lining up for an iPhone 5 in sub-tropical Brisbane.
“I just feel this impulse, like I want to be part of this big adventure, this big revolution and this advance in technology,” Wozniak, who stopped working for Apple in the late 1980s, told local television.