Apple: Free Cases for the iPhone 4

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In the end, Apple (Nasdaq: AAPL  ) CEO Steve Jobs made things right for iPhone 4 users -- but not without venting a lot of steam first.

The tone of the press conference addressing the antenna issue was set from the beginning with the playing of "The iPhone Antenna Song" -- a YouTube video by Jonathan Mann, who produces a song each day and presumably has no affiliation with Apple. Everybody sing along now: "If you don't want an iPhone 4, don't buy it / If you don't like it, bring it back."

Jobs then demonstrated that most every smartphone has antenna issues, not just the iPhone 4. Smartphones like Research In Motion's (Nasdaq: RIMM  ) BlackBerry Bold 9700. Samsung's (Nasdaq: SMSG  ) Omnia 2. Google's (Nasdaq: GOOG  ) Android-based HTC Droid Eris from Verizon (NYSE: VZ  ) .

One by one Jobs held them up, and the signals dropped by three or four bars -- almost identical to the iPhone 4's reaction. (You could almost hear these other phone makers saying, "Oh no, you did not just do that!")

gdgt's live blog quoted Jobs as saying:

... the fact is, most smartphones seem to have the same characteristic as the iPhone 4. If you grip them in a certain way they lose signal strength dramatically, especially in a low-signal-strength area. And one of the things we've learned is that as a leader in the smartphone world now, we need to educate. So what we needed was data. And now we've got some and we're sharing it now. You can see pictures of a Nokia (NYSE: NOK  ) phone with a sticker on it that says "don't touch here." No one has solved this problem.

More data was shared: The iPhone 4's return rate is well below that of the iPhone 3GS. Though Apple believes the iPhone 4's antenna is superior to the 3GS, it does drop more calls -- but less than 1 in 100 more. Jobs believe this is because cases, which pretty much eliminate the signal-drop issue, were widely available for the 3GS at launch but not for the iPhone 4.

Also, prospective buyers hoping for an antenna "fix" as more iPhones are manufactured probably won't get their wish. "Looking at the data," Jobs said, "we don't think we have a problem." Jobs did note the problems with the iPhone 4's proximity sensor, which will be fixed with the next OS update, and he said the white model of the phone will begin shipping on July 30 in limited quantities.

The case for a case
So, no recall. (That giant sucking sound you just heard was AT&T (NYSE: T  ) breathing a sigh of relief.) Apple will provide free cases to everyone who bought the phone to this point, and will offer refunds for any who bought an Apple case already, with the details to be published soon on Apple's website. If you're still not happy, Jobs said you can return the phone for a full refund, and pay no restocking fee.

I'll have to admit that Jobs' signal-drop demonstration with the other smartphones was pretty convincing. After waiting to see how this played out, my plans to upgrade to iPhone 4 are back on again. I'm seeing a bit of grumbling in the blogosphere over Apple's perceived arrogance in the press conference, but a recall over something of this magnitude would have been totally out of proportion to the problem.

I think Jobs has done pretty much all he can do, and now the market will have to judge if it was enough. I've no doubt the answer will be a resounding "Yes." Like the song says, "If you don't want an iPhone 4, don't buy it. If you don't like it bring it back." Simple enough, eh?

Fool analyst Rex Moore asks you to please hold all tickets until the race is official. He owns no companies mentioned in this article. Nokia is a Motley Fool Inside Value recommendation. Google is a Motley Fool Rule Breakers pick. Apple is a Motley Fool Stock Advisor selection. The Fool owns shares of Google. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool has a disclosure policy.

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 19, 2010, at 11:06 PM, rlcato wrote:

    Well you can try this...

    There have been reports of 'faulty' sims interfering in the tray. Take a sharp knife and do a angled trim (bevel) on that side:

    "The metal part of the sim card is not centered and is contacting the sim tray. The sim tray is steel and the sim tray is contacting the outer antenna band. Once you touch the phone, this could be causing a sim issue. If when you touch the antenna line on the lower left it changes the state of frequency, power or what ever, it might actually be messing with the sim card. The metal on the sim is connected to the sim tray, the sim tray is connected to the antenae and the antenae is connected to your hand when you touch the phone. Take a look at your sim card and see if the metal is just off center enough to touch the tray."

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