Apple to give out free iPhone 4 cases

Steve Jobs responds to 'Antennagate' in news conference

Apple will give iPhone 4 users a free phone case to address a slew of complaints about reception problems that have hurt the company's image and shares.

CEO Steve Jobs announced the news at a rare media conference Friday, when he admitted that Apple and the phone were "not perfect" -- but defiantly asserted that smartphone reception issues were a problem shared by Research in Motion, HTC Corp. and the entire industry.

"This has been blown so out of proportion, it's incredible," Jobs told reporters and analysts in an auditorium at Apple's Silicon Valley headquarters. "We are just a band of people working our asses off to surprise and delight people. We are human."

"This is life in the smartphone world. Phones aren't perfect. Most every smartphone we tested behaved like this," he said, referring to the controversy as "Antennagate."

Shares of Apple climbed as much as 1.4% after Jobs' comments, but quickly fell back to trade roughly flat at midafternoon.

"Apple is held to a much higher standard. You don't want to compare yourself to the competition," said Ashok Kumar, an analyst with Rodman & Renshaw. "He did a disservice by comparing the Apple quality to Motorola and HTC."

Job said Apple will offer the free cases only through September 30, suggesting Apple expects the issue to be fixed by then.

If iPhone 4 users were not satisfied, he said Apple will offer a full refund within a month.

Apple has sold well over 3 million units of the iPhone 4 in the three weeks since its launch, he added.

Jobs said he first heard about issues with the wraparound antenna -- which some experts had hailed as an innovation -- 22 days ago. He called media reports that he had known about the issue before the June launch a "total crock."

Analysts and communications experts say the "Antennagate" controversy was less about a flaw in the iPhone than Apple's tone-deaf response to it.

Its first public statements advised consumers to hold the phone differently. Then, earlier this month, it blamed the problem on a software glitch that overstates signal strength.

The controversy followed Apple's very nasty public spat with Adobe Systems Inc and the imposition of new restrictions on app developers, which many viewed as onerous.

"Tone-wise I guess Steve Jobs is dancing like Fred Astaire, although maybe the 2010 version of Astaire. It seems a bit over-the-top, at least initially, saying, 'Hey, we're not the only ones with our hands in the cookie jar,' blaming everybody else where Apple is supposed to be this aspirational brand above everybody else," said Motley Fool's Richard Munarriz.
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