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Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

July 16, 2010 at 10:08 AM

Apple: iPhone 4 has problem, so free cases for buyers

Steve Jobs came out on the defensive during a press conference this morning responding to the iPhone 4 antenna problems, according to live blogs from the event at Apple headquarters in Cupertino.

Jobs acknowledged that there is a problem with his company’s new phone but said it’s only affecting a small number of users.

In response the company’s giving free cases to iPhone 4 buyers through Sept. 30 and refunds to people who bought the $30 “Bumper” cases (the green accessory pictured here) from Apple already. The company can’t make enough Bumpers for everyone right away so Apple will offer alternate cases. Buyers can apply for the cases and refunds on Apple’s Web site next week.

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Apple’s also waiving restocking fees and providing full refunds within 30 days for people who want to return their phones.

The response is probably comparable to what Apple would have been forced to do if it lost in class action lawsuits filed over the phone’s problem.

But the Sept. 30 deadline is curious and raises the question of what will happen to people buying the phone later. It may be a clue that Apple’s working on a hardware fix that it hopes to have done by then.

Apparently investors aren’t terribly worried about the moves, which will cost less than a recall of the phone. Apple stock (AAPL) is hovering a bit below its opening price of $253, trading recently at $251.

The company this week updated the iPhone software to fix its signal strength overstatement and a bug it had working with Microsoft’s Exchange message system. Jobs said the company’s also fixing a problem with the iPhone 4’s proximity sensor and is finally going to start shipping white versions of the phone at the end of July.

Jobs was asked if Apple’s going to do more to address the antenna situation and perhaps change the hardware. He said “I don’t know” whether changing the design will help, according to Engadget’s blog.

Jobs also denied Apple knew about the antenna problem before the phone was released.

Despite the antenna glitch, Apple sold more than 3 million of the phones since it launched three weeks ago.

Jobs said the company’s been “working our butts off” to find a solution to the antenna problem, even though only 0.55 percent of users have called AppleCare about the problem. (So at least 16,500 people have contacted Apple about the problem.)

AT&T data shows the iPhone 4 drops a bit more calls than the iPhone 3GS, but it’s still less than 1 percent more than the 3GS. Jobs provided the number of dropped calls in relation to Apple’s earlier phone, but apparently didn’t provide an overall percentage of calls dropped.

It has also been apparently working hard to find other phones that have a similar problem; Jobs asserted that the BlackBerry Bold 9700, Samsung Omnia II and HTC Droid Eris can have an antenna drop if held a certain way.

Jobs also talked about how much testing Apple does and how well the iPhone 4 has been received, even mentioning Consumer Reports on a slide describing the iPhone 4 as the “#1 Smartphone.”

UPDATE: Nokia – which Jobs used as an example of another company with similar antenna issues – distributed a statement defending its antenna design. Nokia noted that it chooses phone materials carefully – a subtle dig at Apple for making the antenna part of the iPhone 4’s stainless steel exterior band:

Antenna design is a complex subject and has been a core competence at Nokia for decades, across hundreds of phone models. Nokia was the pioneer in internal antennas; the Nokia 8810, launched in 1998, was the first commercial phone with this feature.

Nokia has invested thousands of man hours in studying human behavior, including how people hold their phones for calls, music playing, web browsing and so on. As you would expect from a company focused on connecting people, we prioritize antenna performance over physical design if they are ever in conflict.

In general, antenna performance of a mobile device/phone may be affected with a tight grip, depending on how the device is held. That’s why Nokia designs our phones to ensure acceptable performance in all real life cases, for example when the phone is held in either hand. Nokia has invested thousands of man hours in studying how people hold their phones and allows for this in designs, for example by having antennas both at the top and bottom of the phone and by careful selection of materials and their use in the mechanical design.

Comments | More in | Topics: Apple, apple, Billionaire techies

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