Cupertino, Calif. -- Lines extending several hundred people deep were expected Friday night as Apple and AT&T retail stores began selling the highly anticipated iPhone. The handheld device, which combines a mobile phone, widescreen video iPod and Internet access tool, will go on sale beginning at 6 p.m. in each U.S. time zone. Apple said that it plans to keep each of its 164 retail stores open until midnight to handle the anticipated rush. A 4GB model will retail for $499, with an 8GB version selling for $599. At Apple's flagship retail store in New York, customers began lining up on Tuesday, hoping to be among the first to purchase the device first unveiled in January. In a surprise move, Apple CEO Steve Jobs has promised each of the company's more than 20,000 employees a free iPhone, a move that reportedly will cost more than $12 million.