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Apple announced the date with three television commercials showing off the phone's large touchscreen and ability to watch video, play music and display photos. The ads can also be seen on the company's website.

The US launch date was confirmed by a company spokesman. Apple plans to sell the iPhone in Europe and Japan eventually, but has not announced specific dates.

The iPhone will cost $500 (£250) or $600 (£300), depending on the amount of memory included and will be sold through the online and physical stores of Apple and AT&T, which is the only current service provider. AT&T has exclusive iPhone rights for two years.

Apple's chief executive, Steve Jobs, unveiled the iPhone in January after months of speculation that the company was working on a mobile phone wrapping in features of its popular iPod music and video players.

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mobile phone sales are running at about 1bn units a year, and Jobs noted that if Apple took a one per cent market share in 2008, that would mean the company would sell 10m iPhones.

The debut of the iPhone poses a challenge to other handset makers such as Motorola and Nokia, who are also selling highly profitable high-end 'smartphones'.

AT&T, the biggest US phone company, is also hoping the iPhone's draw will give it an edge over rivals such as Verizon Communications and Sprint Nextel.

Executives from rival companies say the iPhone's high price may turn off many potential customers, while the buzz over the device could carry over to other high-end phones.

The iPhone will come with either 4GB or 8GB of flash memory for storing video, music and photos, and does away with all buttons in favor of a touch screen. It has been lauded for features such as its built-in camera, light and orientation sensors, and sleek design.

Critics also note that it uses GSM, an older wireless technology that is gradually being supplanted by so-called 3G networks that can transmit data much faster.

Apple's stock has been sensitive in recent weeks to any rumours about the iPhone's launch.

Last week the shares rose on a media report that the phone would be launched on 20 June. In mid-May the shares fell after a technology news Web site posted an email purportedly from Apple that claimed the phone would be delayed. Apple said the email was a hoax.