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iPhone 4 Escapes Recall; Apple Offers Free Cases

Steve Jobs says all phone antennas have sensitive areas and that Apple deliberately chose to make iPhone 4's weak spot visible for user convenience.

Apple CEO Steve Jobs defended the performance of the widely-maligned iPhone 4 Friday, and said complaints about the device's antenna are overblown. As a result, Jobs did not order a product recall and instead offered iPhone 4 customers a free case that should mitigate reception problems.

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

Customers can apply for their free case on Apple's Web site starting next week, Jobs said. Those who previously shelled out $29 for an Apple-branded plastic and rubber bumper for iPhone 4 can get their money back.

"We love our users," said Jobs, as he concluded a press conference at Apple's Cuptertino, Calif., headquarters before a group of reporters hand-picked by the company's PR machine.

Jobs also announced that Apple will roll out iPhone 4 in 17 countries starting July 30, and that the company is working on a software update that will fix a bug in the device's proximity sensor.

Jobs was on the defensive for much of the event, and produced data designed to portray the controversy around iPhone 4's antenna as a tempest in a teapot. He said only .55% of iPhone 4 buyers have called Apple to complain about the device's supposed tendency to drop calls or about the so-called "grip of death" issue—where the antenna is baffled if a user covers a spot on the lower left corner.

Jobs also said AT&T return rates for iPhone 4 are just 1.7% on the three million units sold since the product was launched on June 24. By contrast, return rates on the highly praised iPhone 3GS were 6%, he said. Jobs conceded iPhone 4 drops more calls than 3GS, but by an almost statistically insignificant margin—less than one per one hundred calls made. "We're not perfect," Jobs said at one point during the press conference.

The controversy over iPhone 4 bubbled up last week amid user reports that the signal falters if the device's bottom left corner is covered by the palm of one's hand—a situation common if it's wielded by lefties. Reports suggest the problem arises because grasping the phone in such a manner covers a small, black gap that's meant to separate the two ends of iPhone 4's perimeter antenna.

The situation led Consumer Reports to post a blog earlier this week in which the influential testing organization said it couldn't recommend iPhone 4 for purchase until Apple developed a solution. And even New York Democratic Senator Charles Schumer weighed in on the issue. Schumer also said Apple needed to come up with a no charge fix for the grip-of-death scenario.

But Jobs, at Friday's press conference, insisted there is no bug and that all phone antennas are subject to human interference. In fact, he said, that the iPhone 4 antenna's weak spot is visibly noticeable is by design. "We pretty much threw a red flag on it with these lines. X marks the spot," said Jobs. Jobs showed videos of phones from rivals Research In Motion and HTC exhibiting similar finicky behavior when held in certain ways.

The CEO said that, at the end of the day, customers who are still not happy with their iPhone 4 or Apple's offer of a free case can return the device within 30 days of purchase for a full refund.

Apple shares were up slightly, .44% to $252.55, in Nasdaq trading following Jobs' remarks.

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