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Customers line up in the rain in Toronto Friday morning, waiting to purchase the Apple iPhone. ((Peter Nowak/CBC))

They came for breakfast and iPhones, and all they got was granola bars.

Hundreds of people lined up at the Rogers store at Yonge and Dundas in Toronto, starting in the early hours of the morning, through pouring rain, only to learn the cellphone company's flagship outlet had just 100 of the eagerly awaited iPhones in stock.

At 9 a.m., an hour after the store opened, the 300 or so damp people waiting in a line that stretched around the block still hadn't been told they would not be able to buy this year's hottest gadget — at least not from the main store.

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"One hundred phones for the flagship store in the largest city in Canada? That's pathetic," said one waiting customer, who asked not to be named.

Jennifer Gibson, the store's manager, confirmed Rogers had only 80 units of the 8 GB iPhone and 20 of the 16 GB version for sale on Friday. Other stores in the area were stocked with between 40 to 60, she said.

Rogers and its subsidiary, Fido, are the only retail source for the iPhone in Canada.

Elizabeth Hamilton, a spokeswoman for Rogers Communications Inc., said the company would try to help the people lined up at the flagship store to find iPhones at other nearby outlets, although lines at those shops were also long.

As for when new stocks from Apple Inc. would arrive, "it's all very hush-hush," Gibson said.

Customers at the Yonge and Dundas store had been promised breakfast, which many were annoyed to find consisted of a granola bar. Still, the menu was the least of their concerns.

Rogers opened six of its main stores across Canada, including Yonge and Dundas, early on Friday morning and invited the media to witness the long lineups. Television networks flashed pictures of the smiling few who got their iPhones, but many of the grumbling hundreds were ignored.

"It only takes a little corporate respect to tell customers they're out of phones," said Hugh, who did not want his last name used. He had lined up at 1 a.m. and was angry that Rogers hadn't informed customers of the stock shortfall. "This has completely backfired on them."

The story was significantly different just across the street at the Eaton Centre mall, where at 9 a.m. only 20 people were lined up in front of a Rogers store, with a further 80 at a nearby Fido outlet. The stores opened at 10 and, if Gibson's stock estimates were correct, most customers were assured of getting their hands on an iPhone.

Complaints that sales being limited to new customers

The same wasn't true outside of major cities, however. Rachel Ellaway, a prospective buyer in Sudbury, Ont., wrote CBC News to say her Rogers store had sold out of the white 16 GB versions of the iPhone after only 10 customers.

"I was the 14th customer in line and still waiting outside the store after two hours and was only then told they had run out of any variety of the unit I wanted, so I left," she wrote. "Withholding information on numbers of units available was not at all helpful (most people in the queue were unhappy about that policy and tried to get staff to pass the information on) and the waiting was interminable."

'I was the 14th customer in line and still waiting outside the store after two hours and was only then told they had run out of any variety of the unit I wanted, so I left.'—Rachel Ellaway

Other potential buyers said sales were being limited to new customers only.

"Yes, I was one of those people in a lineup, only to find out that sales of this first batch of phones is limited to new registrations only," wrote a reader in King City, Ont. "Thanks, Rogers, for valuing your long-term customers, as you apparently do your new ones."

The launch of the new and improved iPhone, which runs on third-generation cellphone networks, has been a rough one for Rogers. When the company announced its monthly rate plans for the device on June 27, it kicked off a storm of criticism from prospective buyers, who were angry about the low data allowance included since the iPhone is designed to surf the web. Rogers also set a precedent by forcing customers to sign three-year contracts, the longest in the world.

An online petition at ruinediphone.com amassed tens of thousands of signatures in protest within days, forcing the company to back down earlier this week with a cheaper, albeit temporary, rate plan.

"This definitely is a message that people are not happy with it, and definitely, for a business that's trying to sell a great new product, something that could affect their bottom-line sales," said Jamie Lynch, who started ruinediphone.com.

Canadians will still be paying the second highest overall price of all 21 countries where the phone is being launched Friday. Those who buy the device in Canada before the end of August will fork out $2,176 US over the course of their three-year contract. That amount includes the up-front fee for the phone, plus monthly service charge.

Cost, contract length no deterrent for many buyers

Still, many who lined up didn't mind the controversy and planned to buy an iPhone regardless of the cost or contract length.

"I was disappointed but not deterred" by the original rate plans, said Shawn Clark, who lined up at the Eaton Centre Fido store at 5 a.m. "I'm going to have a cellphone for the rest of my life so [the contract] is not an issue."

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Christian Meagher holds his new Apple iPhone 3G, the first sold in Canada, at the Rogers Wireless store in Halifax on Friday. ((Andrew Vaughan/Canadian Press))

George, who did not want his last name used, said he was pleased that Rogers had buckled to customer demand and offered a larger data plan. He was one of of the few at the Yonge and Dundas store to get an iPhone.

"They're trying to be reasonable," he said. "If it's too much for you, don't get it."

Christian Meagher was among the earliest of arrivals at the Rogers store in Halifax and said he decided to buy the phone after hearing the company had lowered its price just days before the launch.

"That's 100 per cent of the reason I'm here today," said Meagher. "It was fairly ridiculous before."

Still, even some Apple aficionados held back from buying the company's latest device.

Tom Crilley, a Halifax graphic designer and self-confessed "Mac-head," bought the first iPod, the first iPod Nano and recently the iPod Touch, but he wouldn't line up for the smartphone.

"I can't bring myself to pay the astronomical fees Rogers is charging. I would love to have an iPhone but I just can't," he said. "I'd feel like a sucker every time I made a phone call with the thing."

Analysts have warned that iPhone sales may not live up to the hype, with only a small segment of consumers interested in forking out for the expensive phone and its package.

Only Italy more expensive than Canada

Of the 21 countries where the iPhone is being launched on Friday, Italy comes in first with $2,554 for a two-year service agreement. The amounts are in U.S. dollars for the purpose of comparison in CBCNews.ca's iPhone iNdex.

On a monthly basis, Canadian customers can choose from voice plans that start at $20 and add on the new 6 GB data plan for $30, plus the $6.95 system access fee, for a total of $56.95 before taxes. After Aug. 31, customers will pay at least $60 for a data plan that offers only 400 MB worth of usage.

Rogers hasn't said how many iPhones it has received to sell in Canada or would like to sell here, but has said it has sufficient inventory.

Apple has said it hopes to sell 10 million iPhones worldwide by the end of this year.

With files from the Canadian Press and the Associated Press