Apple Inc. (AAPL) said on Monday it has sold its one-millionth iPhone, a few weeks ahead of schedule, reassuring investors who had worried that last week's price cut signaled weak demand for the phone.

Apple's shares, which fell more than 9 percent last week following last Wednesday's price cut announcement, rose as much as 4 percent in morning trading on the Nasdaq.

Apple cut the price of its first mobile phone to $399 from $599 and said it would sell 1 million units by the end of September.

Pacific Crest analyst Andy Hargreaves said Apple's ability to reach its target early was partly related to the price cut.

"Apple was being coy when they said the end of September last week. I think they knew it was going to be much earlier than that. I don't think (the price cut) drove three weeks of sales into four days," Hargreaves said.

"It is good news. The more phones they're able to get into people's hands, the more market share and the broader their user base," he said.

The iPhone was launched to much fanfare in late June and combines a touch-screen phone, Internet browser and music and video player.

"One million iPhones in 74 days -- it took almost two years to achieve this milestone with iPod," Apple Chief Executive Steve Jobs said in a statement.

Apple has said it will sell 10 million iPhones by the end of 2008.

Shares of AT&T Inc. (T), the only U.S. wireless service provider selling the phone, rose more than 1 percent on the New York Stock Exchange after the news. The stock was up 48 cents at $39.21 an hour into the session.

Apple's shares were up 2.34 percent at $134.85.