Apple has reason to celebrate today. According to a new report published by iSuppli, iPhone topped the charts during the month of July, outselling every Smartphone on the U.S. market, even rivaling the most popular feature phone sold; LG's Chocolate.

I find this news particularly interesting because, since its launch, numerous Smartphone fansites have long contended that iPhone isn't a Smartphone, but rather a luxury feature phone. And therefore doesn't compete in the same market with Palm, Blackberry, Nokia, et al. Yet according to this report, iPhone managed to best every Smartphone vendor in sales, including Palm's entire line of Treos. Even Blackberry was soundly trounced by iPhone in popularity and sales.

Not bad for an alleged feature phone, eh? Hey, whatever helps you Blackberry and Treo fanboys sleep at night night, go right on living in that fantasy world you've created.

iSuppli was particularly bullish about iPhone's growth prospects, even projecting triple-digit growth over the next two years, topping out at 30 million units sold by 2011. Not surprisingly Apple stock is up nearly 4% at the time of this post.