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An iPhone can function as a video camera (video recording was not a standard feature until the iPhone 3GS was released), a camera phone, a portable media player, and an Internet client with email and web browsing capabilities, can send texts and receive visual voicemail, and has both Wi-Fi and 3G connectivity. The user interface is built around the device's multi-touch screen, including a virtual keyboard rather than a physical one. Third-party as well as Apple application software is available from the App Store, which launched in mid-2008 and now has over 500,000 "apps" approved by Apple. These apps have diverse functions, including games, reference, GPS navigation, social networking, security and advertising for television shows, films, and celebrities.

There are five generations of iPhone models, each accompanied by one of the five major releases of iOS (formerly iPhone OS). The original iPhone was a GSM phone that established design precedents like screen size and button placement that have persisted through all models. The iPhone 3G added 3G cellular network capabilities and A-GPS location. The iPhone 3GS added a compass, faster processor, and higher resolution camera, including video recording at 480p. The iPhone 4 has a rear facing camera (720p video) and a front facing camera (at a lower resolution) for FaceTime video calling and for use in other apps like Skype. The iPhone 4 featured a higher-resolution 960x640 display; it was released on June 24, 2010. In the U.S., AT&T was the only authorized carrier until February 10, 2011, when a CDMA version of the iPhone 4 launched for Verizon. On October 4, 2011, Apple announced the iPhone 4S. The iPhone 4S added a higher resolution camera (8 megapixel) with 1080p video recording, face detection, and video stabilization, a faster, dual core processor, world phone capability (allowing a single handset to operate on networks based on both GSM/UMTS and CDMA technologies), GLONASS support and a natural language voice control system called Siri. It will be available in 16 GB and 32 GB as well as a new 64 GB capacity. It was also announced that in the U.S. Sprint would begin carrying the iPhone 4 and iPhone 4S and C Spire Wireless announced that it would be carrying the iPhone 4S as well.

Development of the iPhone began in 2005 with Apple CEO Steve Jobs' direction that Apple engineers investigate touchscreens. He also steered the original focus away from a tablet, like the iPad, and towards a phone. Apple created the device during a secretive collaboration with AT&T Mobility—Cingular Wireless at the time—at an estimated development cost of US$150 million over thirty months. Apple rejected the "design by committee" approach that had yielded the Motorola ROKR E1, a largely unsuccessful[citation needed] collaboration with Motorola. Instead, Cingular gave Apple the liberty to develop the iPhone's hardware and software in-house and even paid Apple a fraction of its monthly service revenue (until the iPhone 3G), in exchange for four years of exclusive U.S. sales, until 2011.

Jobs unveiled the iPhone to the public on January 9, 2007 at the Macworld 2007 convention at the Moscone Center in San Francisco. The iPhone went on sale in the United States on June 29, 2007, at 6:00 pm local time, while hundreds of customers lined up outside the stores nationwide. The passionate reaction to the launch of the iPhone resulted in sections of the media christening it the 'Jesus phone'. The original iPhone was made available in the UK, France, and Germany in November 2007, and Ireland and Austria in the spring of 2008.

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On July 11, 2008, Apple released the iPhone 3G in twenty-two countries, including the original six. Apple released the iPhone 3G in upwards of eighty countries and territories. Apple announced the iPhone 3GS on June 8, 2009, along with plans to release it later in June, July, and August, starting with the U.S., Canada and major European countries on June 19. Many would-be users objected to the iPhone's cost, and 40% of users have household incomes over US$100,000. In an attempt to gain a wider market, Apple retained the 8 GB iPhone 3G at a lower price point. When Apple introduced the iPhone 4, the 3GS became the less expensive model. Apple reduced the price several times since the iPhone's release in 2007, at which time an 8 GB iPhone sold for $599. An iPhone 3GS with the same capacity now costs $49. However, these numbers are misleading, since all iPhone units sold through AT&T require a two-year contract (costing several thousand dollars and including an early termination fee), and a SIM lock.

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Apple sold 6.1 million original iPhone units over five quarters. Recorded sales have been growing steadily thereafter, and by the end of fiscal year 2010, a total of 73.5 million iPhones were sold. By 2010/2011, the iPhone has a market share of barely 4% of all cellphones, but Apple still pulls in more than 50% of the total profit that global cellphone sales generate. Sales in Q4 2008 surpassed temporarily those of RIM's BlackBerry sales of 5.2 million units, which made Apple briefly the third largest mobile phone manufacturer by revenue, after Nokia and Samsung. Approximately 6.4 million iPhones are active in the U.S. alone. While iPhone sales constitute a significant portion of Apple's revenue, some of this income is deferred.
The back of the original iPhone was made of aluminum with a black plastic accent. The iPhone 3G and 3GS feature a full plastic back to increase the strength of the GSM signal. The iPhone 3G was available in an 8 GB black model, or a black or white option for the 16 GB model. They both are now discontinued. The iPhone 3GS was available in both colors, regardless of storage capacity. The white model was discontinued in favor of a black 8 GB low-end model. The iPhone 4 has an aluminosilicate glass front and back with a stainless steel edge that serves as the antennas. It was at first available in black; the white version was announced, but not released until April 2011, 10 months later.

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The iPhone has garnered positive reviews from critics like David Pogue and Walter Mossberg. The iPhone attracts users of all ages, and, besides consumer use, the iPhone has also been adopted for business purposes. User of the iPhone 4 reported dropped/disconnected telephone calls when holding their phones in a certain way. This became known as antennagate. On January 11, 2011, Verizon announced during a media event that it had reached an agreement with Apple and would begin selling a CDMA2000 iPhone 4. Verizon said it would be available for pre-order on February 3, with a release set for February 10. In February 2011, the Verizon iPhone accounted for 4.5 percent of all iPhone ad impressions[vague] in the U.S. on Millennial Media's mobile ad network. On March 2, 2011, at the iPad 2 event, Apple announced that they have sold 100 million iPhones worldwide and the phone has been consistently recognised as one of the best phones on earth.[who?]. On Tuesday, September 27, Apple sent invitations for a press event to be held October 4, 2011 at 10:00AM at the Cupertino Headquarters to announce details of the next generation iPhone, which turned out to be iPhone 4S. Over 1 million 4S models were sold in the first 24 hours after its release in October 2011. Due to large volumes of the iPhone being manufactured and the its high selling price, Apple became the largest mobile handset vendor in the world by revenue, surpassing long-time leader Nokia. American carrier C Spire Wireless announced that it would be carrying the iPhone 4S on October 19, 2011.