June 27 (Bloomberg) -- Apple Inc.'s iPhone is a ``beautiful and breakthrough'' mobile device that lives up to the hype.

That's the word from reviewers for the Wall Street Journal, New York Times and USA Today, who praised the software and design of Apple's melded mobile phone and iPod media player. The iPhone's strengths outweigh its spotty network service and price of as much as $600, they said.

``Despite some flaws and feature omissions, the iPhone is, on balance, a beautiful and breakthrough handheld computer,'' Walt Mossberg, technology columnist for the Wall Street Journal, said in a review yesterday. ``Its clever finger-touch interface, which dispenses with a stylus and most buttons, works well, though it sometimes adds steps to common functions.''

Chief Executive Officer Steve Jobs aims to sell 10 million iPhones in 2008, giving the company 1 percent of the mobile-phone market. He expects the iPhone to become Apple's third major business, along with the Macintosh computer and iPod, whose combined sales more than tripled in five years to almost $20 billion in 2006.

``If the device lives up to the hype, then that will be a pretty big positive, because the hype has been quite large,'' said Andy Hargreaves, an analyst at Pacific Crest Securities in Portland, Oregon. Apple may sell as many as 200,000 iPhones in the first two days after its release on June 29, he said.

Shares of Cupertino, California-based Apple rose $2.24, or 1.9 percent, to $121.89 at 4 p.m. New York time in Nasdaq Stock Market trading. They have climbed 44 percent this year.

AT&T Service

Mossberg, USA Today's Edward Baig and David Pogue, a columnist for the New York Times, all said one of the iPhone's main drawbacks is its exclusive tie to AT&T Inc., which delivers inconsistent coverage. AT&T's network ranked either last or second-to-last in 19 out of 20 major cities in providing a signal, Pogue said, citing a Consumer Reports survey.

AT&T, which has a multiyear license to distribute the phone in the U.S., is selling the product with a two-year service plan. Prices for the plans are $60 to $220 a month, San Antonio-based AT&T said yesterday.

The iPhone relies on AT&T's Edge service, which lags behind AT&T's fastest so-called third-generation, or 3G, data networks. While the Edge network failed to match the broadband data speeds home users may be accustomed to, Baig said the iPhone is still a ``glitzy wunderkind worth lusting for.''

``Apple has delivered a prodigy -- a slender fashion phone, a slick iPod and an Internet experience unlike any before it on a mobile handset,'' Baig wrote yesterday.

`Forgive Its Foibles'

Pogue concurred, though he took Apple to task for failing to include chat software. He also said many users would prefer tapping out messages on Research In Motion Ltd.'s BlackBerry, rather than on the iPhone's touch-screen keyboard.

``Even in version 1.0, the iPhone is still the most sophisticated, outlook-changing piece of electronics to come along in years,'' Pogue wrote. ``It does so many things so well, and so pleasurably, that you tend to forgive its foibles.''

Mossberg identified several, including the lack of games and customers' inability to use songs stored on the phone as ring tones.

``It isn't for the average person who just wants a cheap, small phone,'' he said. ``But, despite its network limitations, the iPhone is a whole new experience and a pleasure to use.''

Apple will begin selling the iPhone on June 29 at 6 p.m. in each U.S. time zone through its 162 stores. AT&T will offer the handset through 1,800 company-owned stores.

``Everyone knows that in the first couple of days they're going to sell pretty well,'' said Hargreaves, who rates Apple's shares ``outperform'' and owns them personally. ``The trick is what will be the follow-through in the days and months after that.''

To contact the reporter on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net

Last Updated: June 27, 2007 16:10 EDT