Mobile // Mobile Devices
10:34 AM

Apple Shrugs Off 'Antennagate'

iPhone 4 sales continue to boom despite company's failure to provide permanent fix for finicky receiver.

Call it the fanboy factor. Despite a significant design flaw that led respected reviewer Consumer Reports to give it a big thumbs down, the iPhone 4 continues to fly off the shelves.

Image Gallery: Apple iPhone 4, A True Teardown
(click for larger image and for full photo gallery)

"Let me be clear on this, we're selling every unit we can make," said Apple chief operating officer Tim Cook, during a conference call Tuesday, where Apple announced robust third-quarter results.

Indeed, Apple revealed it sold 8.4 million iPhones during the period, a 61% increase over the same quarter a year ago. "It was a phenomenal quarter that exceeded our expectations all around, including the most successful product launch in Apple's history with iPhone 4," said Apple CEO Steve Jobs, in a statement.

The iPhone has never been known as a solid platform for voice calling. But iPhone 4's antenna design brought the franchise's reliability to a new low. If the device is held in such a way that the lower left hand corner is covered by the user's palm, the signal is interrupted and calls are dropped.

Ironically, the problem is particularly acute for lefties, who are heavily represented in the creative smartset that forms Apple's core fan base.

Jobs acknowledged the "antennagate" issue last week and offered to give all iPhone 4 buyers a free case that insulates the antenna from human contact. But he steadfastly has refused to recall the product.

That iPhone 4 continues to enjoy booming sales despite such a major flaw is testament to the power of the so-called "reality distortion field" that surrounds Apple and its brand. The combination of slick design, hipster-oriented marketing campaigns and Jobs' Zen-powered persona appears to have given Apple's actual products significant leeway to be mediocre.

It's not just iPhone 4 that's benefiting from Apple's halo. Mac sales were up 33% year-over-year in the third quarter, and the company sold 3.27 million iPads and 9.41 million iPods during the period. Apple is now projecting $8 billion in revenue for the current fourth quarter—well ahead of Wall Street analysts' expectations.

For the third quarter overall, Apple reported earnings per share of $3.51 on record revenue of $15.7 billion and net profit of $3.25 billion.

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