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Apple's Offer to iPhone 4 Users: Free Bumpers

"We're not perfect, phones aren't perfect. But we want to make all our users happy." And with that uncharacteristically humble introduction, Steve Jobs offered what passed for Apple's apology to iPhone 4 users who have encountered reception troubles and said they would receive free protective bumpers for their units.

Steve Jobs speaks with the media AP

"We love our users. We try hard to surprise and delight them. We work our asses off and have a fun time doing it," he said during a press briefing Friday morning at the company's corporate headquarters in Cupertino, Calif. He later added: "When people are criticizing us, we take it really personally...maybe we should have a wall of PR people protecting us from that, but we don't."

That fit with the general tenor of a presentation in which Jobs downplayed the extent of the problem, which he said "has been "blown way out of proportion."

Jobs told reporters that the percentage of users who have called Apple about antenna or reception issues was "0.55%"

"Historically for us, this is not a large number," Jobs declared as he ran through the highlights of an episode he referred to as "Antennagate."

Despite the controversy over the iPhone 4's reception troubles, Jobs reported that Apple had sold over 3,000,000 units in the last week. What's more, he added that iPhone 4 return rates were 1.7% compared to the earlier 3GS version, where the return rate was 6%.

However, Jobs did allow that iPhone 4 calls drop more frequently than calls made on the iPhone 3GS. He didn't give out specific numbers but said that the rate was less than one additional call per additional 100 calls (compared to iPhone 3GS).

"When our engineers look at this data, it's hard not to admit there's a problem," he said.

Jobs said that the reception troubles users have complained about were not unique to the iPhone. To drive home that point, Jobs offered a demo of how range is affected with various smartphones, saying that other devices such as the BlackBerry, the Samsung Omnia 2 and the HTC Droid. "The same thing is happening there too," he said, adding that such was "life in the smartphone world," where "every phone has weak spots."

"We went to a lot of trouble to show people where you can touch the antenna," he said. "You might as well put a red flag there."

"We didn't think it would be a big problem because every phone has this issue," Jobs continued.

Apple had been "working our butts off for the past 22 days to find out the real problem and the real solutions," Jobs said

Most tech stocks were sold off during a day when the Dow and Nasdaq got creamed. But shares of Apple rallied after the press conference as investors apparently were relieved that Apple would not be paying for a full recall. One analyst had earlier put the cost of a full recall of iPhone 4s at around $1.5 billion. The company's shares ultimately succumbed to the selling that washed over Wall Street, finishing off $1.55.

Live Blog from Press Conference

On Monday, Consumer Reports said that its testing confirmed user reports that holding the phone over a particular spot drastically reduces the signal strength it receives. Covering the spot with duct tape or a case alleviates the problem.

Anyone who bought a bumper for their iPhone will be entitled to a full refund through September. Apple also will offer full refunds to any iPhone users who wish to return their devices within the next 30 days.

Offering his own theory, he pointed to the new design on the iPhone 4, which was not shown to anybody, and thus, there were no cases. Cases fix the issue, he said.

In late June Apple acknowledged reception issues affecting the smartphone in a note to users on its Web site. On Thursday, Apple released a software update for the iPhone 4, as well as the previous two iPhone models, that changes how reception is shown to the end user.

"People Want to Tear You Down"

Asked during the subsequent question-and-answer section whether Apple might have done anything differently knowing what Jobs knows now, Apple's CEO let people see a rarely-seen side of his personality.

Well, of course the Consumer Reports stuff was bad, and of course we would have liked to get on this sooner. We just got this data. We just learned what was going on. We're an engineering company. We think like engineers. We love it; wwe think it's the right way to solve real problems. I don't think that's going to change, and the way we love our customers isn't going to change. Maybe it's human nature -- when you're doing well, people want to tear you down. I see it happening with Google, people trying to tear them down. And I don't understand it... what would you prefer? That we were a Korean company, that we were here in America leading the world with these products... maybe it's just that people want to get eyeballs on their sites. We've been around for 34 years... haven't we earned the credibility and the trust of the press? I think we have that from our users. I didn't see it exhibited by some of the press as this was blown so far out of proportion. I'm not saying we didn't make a mistake - we didn't know that it would have these issues. We didn't know we were putting a bull's eye on the phone... but this has been so overblown. But to see how we could do better is going to take some time.

In a related bit of news, Jobs said that Apple will ship the delayed white version of the iPhone by the end of this month.

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