Cupertino, Calif. -- Apple CEO Steve Jobs downplayed the antenna reception problems of the iPhone 4 Friday but offered solutions to those customers unhappy with their purchase.
Apple will supply a free case, which has been shown to solve the reception issue, to all iPhone 4 owners, as well a software update to Apple's iOS4 operating software, which Jobs said will correct an error in the way the iPhone displays its signal strength bars.
The company will offer a free Bumper case or similar case marketed by Apple to every iPhone 4 user that registers on the Apple website starting "late next week" through Sept. 30. It will refund the cost to anyone who already bought an Apple case. Those who bought third-party cases will not be offered a refund but can claim an Apple case like anyone else.
Jobs also acknowledged some reported problems with the iPhone 4's proximity sensor and said the next version of iOS will address them.
Jobs opened up the press event here by demonstrating via video that the reception problem is not unique to the iPhone 4 but common to many smartphones including the Blackberry 9700, the HTC Droid Eris and the Samsung Omnia.
"It's a challenge for the whole industry. Phones aren't perfect," Jobs said. "We haven't figured out a way around the laws of physics. Yet."
Jobs dubbed the last 22 days "Antennagate," and essentially blamed the media for blowing the problems out of proportion. He cited AppleCare [Apple's customer service unit] data showing that 0.55 percent of all iPhone 4 users have called about antenna or reception problems. "One half of one percent. This doesn't really jive with what you read about this problem," he said.
Jobs continued: "And I can tell you this, because we're being totally transparent. I must tell you, that the iPhone 4 drops more calls than the iPhone 3GS. So how many more? The iPhone drops less than one additional call per 100."
Jobs also cited AT&T's return rate of 1.7 percent for the iPhone 4 compared with a 6 percent return rate for the iPhone 3GS as proof that the perception of the problem is bigger than the problem itself.
As for dissatisfied Apple customers: "Whatever it is, no questions asked, they can return the phone. Bring back an undamaged iPhone 4 within 30 days, and get a full refund." When asked later whether AT&T would offer rebates on user contracts, Jobs replied, "I believe so, yes."
Jobs concluded. "We do this because we love our users, and if we screw up, we pick ourselves up and we try harder. And when we succeed, they reward us by staying our users. We take this really personally. So we've worked the last 22 days on this trying to solve the problem. And we think we've gotten to the heart of the problem."
Jobs also reported that Apple has sold more than 3 million iPhone 4s since they became available last month. He added that the white version of the iPhone 4, which was previously delayed, will ship at the end of this month and that the iPhone 4 will ship to 17 additional countries on July 30.