Apple enjoys - and pays for - some of the best public relations in the world, but in last week's special press conference, Steve Jobs and company focused on science, not spin, to explain the antenna issues that have arisen with the iPhone 4. (Apple has posted a streaming video [1] of the press conference online. The video omits a long and interesting Q&A at the end.)

Addressing the Problem -- Although the core of the presentation focused on explaining the problems involved, Apple is offering a few concrete solutions.

As promised when the issue first appeared, Apple released iOS 4.0.1 the day before the press event, an update that changes the iPhone's algorithm for calculating and displaying signal strength. This doesn't improve signal reception but makes small changes in signal quality more obvious, and displays worse signal quality more accurately.

The update also increases the size of the first three signal bars, to make the drop-off in signal not seem so severe (see "iOS Updates Adjust iPhone Bars, Apply iPad Fixes [2]," 15 July 2010).

Apple will also offer free cases (normally $29) to all iPhone 4 purchasers through 30 September 2010, and give refunds to people who bought Apple's iPhone bumper cases. That includes purchases made outside the United States. The company can't make bumpers fast enough through the end of the quarter, said Jobs, so Apple will offer a choice of free third-party cases beginning late this week. (Not all third-party cases will be available, and the refund applies only to bumpers, not to third-party cases that were purchased.)

The company will also allow early buyers to return an undamaged iPhone 4 for a full refund within 30 days of purchase; the same applies to AT&T. Apple hedged during the Q&A that followed the presentation as to whether AT&T would waive cancellation fees to release customers from a service contract. AT&T and other carriers typically allow only a 14-day rescission period.

Aside from the antenna issue, Jobs said that Apple is actively investigating a problem causing the proximity sensors of some iPhone 4s to not work properly, suggesting a fix would appear in the next iPhone software update. Also, the white iPhone 4, which was not available at launch, will begin shipping at end of July.

Antenna-gate -- The crux of the issue, according to Jobs, is that this antenna problem affects all cellular phones, not just the iPhone 4. Jobs joked that Apple didn't make it easier on themselves by identifying the area at the lower left edge where two antennas meet, saying, "Here's where you touch it, everybody!"

To demonstrate how widespread the issue is, he played videos of Apple engineers holding a BlackBerry Bold 9700, HTC Droid Eris, Samsung Omnia II, and an iPhone 3GS, all of which lost signal when held such that the bottom antennas were blocked by the hand. (You can watch the videos at a page Apple created on its Web site [3].)

Refuting the idea that Apple didn't properly test the iPhone 4 before launch, Jobs explained that the company has spent $100 million to build a state-of-the-art test facility comprising 17 anechoic chambers, run in part by 18 scientists and engineers holding Ph.Ds. Apple also posted a video about these chambers and its testing methods [4]. (This adds to a growing library of Apple high-tech behind-the-scenes peeks, such as the way iPhone 4 screens are manufactured and tested [5], or how the unibody MacBook Pro is machined.)

For a closer look at the antenna problem and why offering a free case will help, see Rich Mogull's article "Why Using an iPhone 4 Case May Improve Signal Strength [7]" (16 July 2010).

Recalibrating Perceptions -- Jobs admitted, "We knew that if you gripped it in a certain way, the bars were going to go down a bit, like every smartphone. And we didn't think it would be a big problem."

Apple's real job with the press conference was to counteract the idea that the iPhone 4 is worse in this respect than others. After all, the reason Apple held the press conference (and apparently pulled Jobs away from a vacation in Hawaii) was to address the high level of attention the issue has received.

To do that, Jobs unveiled numbers that indicated the scope of the problem is much smaller than the reporting and speculation would suggest:

• Apple has sold more than 3 million iPhone 4s in the product's first three weeks. These numbers tell the story that buyers haven't been discouraged by antenna reports, but don't reveal whether buyers are dissatisfied or not.
• According to AppleCare call logs, the percentage of all iPhone 4 users who have called about antenna or reception issues has been 0.55 percent. Farhad Manjoo suggests at Salon [8] that Apple's previous lack of response on this issue may have suppressed such complaints, but that requires the assumption customers expected to be stonewalled and avoided calling as a result.
• AT&T's return rates for the iPhone 4 are lower than those for the iPhone 3GS for "early shipments" compared to this time period last year. Returns of the iPhone 3GS were 6 percent, while the iPhone 4 returns are at 1.7 percent.
• Using data given to Apple by AT&T a few days before the press conference, the frequency of dropped calls using the iPhone 4 is slightly higher than the iPhone 3GS. Jobs wouldn't reveal AT&T's exact numbers for competitive reasons, but noted that the number of dropped calls is less than 1 additional per 100 compared to the iPhone 3GS. Slate's Farhad Manjoo says that AT&T told him in 2009 that the average iPhone call drop rate was 1 in 100, meaning the iPhone 4 rate could be twice as high (nearly 2 percent of calls) unless AT&T and Apple have improved call dropping. In any case, even a 1-percent call drop rate should be unacceptable on any phone.

Jobs offered a "pet theory" about these last numbers. Since the iPhone 3GS had the same form factor as the iPhone 3G, people who upgraded kept their cases. They didn't experience the antenna issue because they weren't touching the phone itself.

And a Few Words for the Assembled Press -- Jobs repeatedly emphasized that Apple is an engineering company. "We think like engineers," he said, "we love it. We think it's the right way to solve real problems." But he also reiterated, dozens of times, that Apple loves its customers and wants to make them happy, even the small percentage of users who are impacted by the antenna problem.

In the question-and-answer session that followed the presentation, Jobs didn't hide the fact that he thought the press coverage of the issue has been "blown so far out of proportion." Jobs, along with Chief Operating Officer Tim Cook and Senior Vice President of Mac Hardware Engineering Bob Mansfield, took jabs at Gizmodo (referencing the iPhone 4 prototype that the site acquired in a dubious fashion) and refuted two specific press reports. A Bloomberg article [9] stating that an Apple engineer warned about the problem during development was "a total crock" and "total B.S." Also, a New York Times article asserting that a software update could fix the problem was "patently false," according to Scott Forstall, Senior Vice President, iPhone Software.

"In the search of eyeballs for Web sites, people don't care what they leave in their wake," Jobs said. "Haven't we earned the credibility and trust from some of the press to give us a little bit of the benefit of the doubt, of our motivations, the fact that we're confident and will solve these problems? I think we have that trust from our users, but I didn't see that in the press. This thing was blown so far out of proportion. But I'm not going to say we're not at fault. We didn't educate enough."

Despite expectations about free cases (now granted) and iPhone 4 recalls (not ever seriously considered, according to Jobs), the antenna situation is the same today as it was before the event. The real goal of the press conference was to dampen runaway speculation. By the end, Apple did something that is, of late, uncharacteristic of the company: it became more transparent about a real problem, owned up to its mistakes, and promised to improve in the future. How refreshing.

[1]: http://www.apple.com/apple-events/july-2010/
[2]: http://db.tidbits.com/article/11431
[3]: http://www.apple.com/antenna/
[4]: http://www.apple.com/antenna/testing-lab.html
[5]: http://www.apple.com/iphone/home/includes/video-iphone.html#video-iphone
[6]: http://www.apple.com/macbookpro/includes/overview_hero8.html#unibody
[7]: http://db.tidbits.com/article/11435
[8]: http://www.slate.com/id/2260619
[9]: http://www.bloomberg.com/news/2010-07-15/apple-engineer-said-to-have-told-jobs-last-year-about-iphone-antenna-flaw.html

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