Apple Offers Free Bumpers And Excuses

In a hasty press conference, Apple offered free silicone cases to users of its iPhone 4, which has been plagued by signal problems.

Apple CEO Steve Jobs said the problem had only affected “a small batch of phones”, and was inherent to all smartphones to a greater or lesser extent.”We haven’t figured out a way around the laws of physics yet,” he joked. All phone makers have to deal with interference form the human body, which causes iPhones to lose signal, he said.

iPhone sales have slowed

The rubber cases – which insulate the phone’s antenna – will be offered to all iPhone 4 users, until September 30, and will only cost the company about $1 each to make, but the company will face other costs. Sales of the phone have slowed – Jobs told the conference that sales have slowed since the problem was reported, with only three million phones sold in three weeks, compared with 1.7 million in the first three days.

The company is also facing class action law suits over the iPhone 4.

The case offer will also hit the revenue Apple counted on for accessories somewhat – especially since the company is offering a refund to those who have already bought the bumpers. Supplies of the bumpers may be limited, Apple admitted, as it cannot have them made quickly enough.

Despite sustained criticism of the iPhone 4 – and a poor write-up in the influential magazine Consumer Reports – Jobs said it was a hit with customers. Only 1.7 percent had been returned by customers. This figure compares to a six percent return rate for the iPhone 3GS which launched last year.

Apple’s problem with the iPhone has been likened to problems faced by car-maker Toyota, though eWEEK write P J Connolly believes a comparison with General Motors would be fairer.

Jobs’ performance was in many ways a more nuanced version of his original response, suggesting users just hold the phone differently, with the addition of a free case, and – earlier – the release of a new version of iOS4 which improves the iPhone’s reporting of signal strength, an aspect which complicated the case, and which Apple has said is the main part of the problem.

The stock market seems to have judged Jobs handled it well, as Apple’s share price has been going up since the press conference.