Apple Inc and Best Buy reached an agreement under which the retailing giant will put up for sale the iPhone 3G on a national scale through its chain of Best Buy Mobile outlets.

Customers with a taste for sophisticated gadgets which also work as a mobile phone will be able to purchase the newly-launched iPhone 3G from Best Buy Mobile outlets starting September 7.

The deal reached between the above-mentioned companies will not only make Best Buy the first retailer to vend iPhone in the United States, but will also boost the sales of the classy mobile phone which may very well be the hottest gadget for the upcoming holiday season. Until now, Apple Inc has sold its iPhone handset only directly and through AT&T retail stores. This agreement will help Apple cope with the enormous demand for its iPhone 3G.

However, the handsets sold in Best Buy stores will still need a two-year contract with AT&T.

Best Buy, the No.1 electronics retailer in the U.S. with about 970 stores, will make the agreement with Apple Inc official in a statement to be issued during a press conference on Wednesday.

Best Buy Mobile President Shawn Score said the partnership with Apple is an excellent step for the company as it “solidifies” Best Buy stores as “the place to go for the cool stuff," Reuters reported.

"We do believe that broadening our assortment and having iPhone in our stores is certainly going to be very important" Score added.

The deal to sell Apple’s iPhone comes amid Best Buy’s efforts to implement expansion plans. The Richfield, Minnesota-based retailer said a few days ago that it plans to sell electronics also through kiosks in airports. Best Buy also plans to open music centers inside a number of its stores in order to sell musical instruments. The retailer operates approximately1150 stores in the United States, Puerto Rico, Canada, China, Mexico and Turkey.

Best Buy has a 21% share of the country’s electronics market and broadened its share of the cell phone market pie to 3.6% from 2% last year. The giant retailer is already marketing a number of smart phones such as RIM BlackBerry Curves, Palm Treos and Samsung Instinct.