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from the L.A. Times

Live Blog: Apple iPhone 4 news conference

Apple
Steve Jobs, Apple's chief executive, at a press conference Friday to address iPhone 4 reception problems. Credit: David Paul Morris / Getty Images
Apple Inc. is holding a news conference at its Cupertino, Calif., headquarters to respond to rising criticism of its iPhone and possibly offer a solution to owners who have had reception problems.

The company launched the phone last month, and it has sold briskly. But some owners have complained of dropped calls when they hold the phone in a way that covers up its antenna, which is contained in a stainless-steel band around the phone's frame. On Monday, Consumer Reports said it would no longer recommend the phone because of the antenna problem. That marked the first time it had not recommended an iPhone, an icon of popular culture.

Apple is seizing control of the situation after competitors began to capitalize on its rare misstep that prompted David Letterman to roll out the Top 10 Signs You've Purchased a Bad iPhone list. A string of woes related to the iPhone 4 has also prompted some to seek alternative explanations, including the notion that the phone may simply be jinxed.

10:02 a.m.

Intimate crowd of media and analysts waiting for the show to start. Probably only about 50 in attendance.

10:04 a.m.

The press conference opens by playing a video of Jonathan Mann's "The iPhone 4 Antenna Song:" "The media loves a failure." "I have yet to drop a call. This whole thing is stupid. You can call me a fan boy. I have been called worse things."

10:07 a.m.

Check out the song here. "If you don't want an iPhone 4, don't buy it. If you bought one and don't like it, bring it back."

Steve Jobs on stage for 15-minute presentation, said they saw the song on YouTube this morning and couldn't resist.

"We're not perfect," Jobs said. "And phones are not perfect either. But we want to make all of our users happy. "

Jobs: Sold over 3 million since launched three weeks ago. Judged No. 1 smart phone in variety of publications. "People seem to like it," Jobs said. "Users seem to love it."

Apple started getting reports about the new antenna system...

...not long after [it] started shipping. It has since been dubbed Antennagate.

"It's not like Apple has had its head in the sand," Jobs said. "Apple is [an] engineering driven company. ... We want to find out what the real problem is before we start to come up with solutions. We have been working our butts off for the last 22 days. ... Today we want to share what we have learned."

10:10 a.m.

Jobs said the problem is not unique to the iPhone 4. The company did its own testing. It looked at other smart phones. Jobs showing the BlackBerry Bold 9700 and when gripping it, the bars decrease. "Identical to the videos on the Web about the iPhone 4," Jobs said.

10:11 a.m.

Jobs shows HTC Droid Eris does the same thing. Samsung Omnia II, a Windows mobile phone, does the same thing when gripping the lower corner. When the grip releases, it returns to four bars.

"We could have gone on and on ... most smart phones act the very same way," Jobs said. The phones were tested in areas of relatively weak signal strength. "This is life in the smart phone world, phones aren't perfect. And it's a challenge for the whole industry," Jobs said. "Every smart phone has weak spots."

"We're not perfect," Jobs said. "We went to a lot of trouble to put a beautiful line in the stainless steel to show here's where you touch it everybody. ... When it did drop it looked far more catastrophic than it really was ... We screwed up on our algorithm."

Apple put out a new release Thursday to show the correct algorithm.

10:16 a.m.

Jobs showing photos of antenna lab. "You have to build these rooms, if you don't shield what testing from all outside interference, you don't get accurate tests."
 
It has 17 anechoic chambers. Invested over $100 million in facilities and have 18 PhD scientists and engineers working in this area doing "advanced antenna design."

iPhone 4 was tested this way. Jobs said Apple knew that the phone would do this because "every smart phone has this issue." "It's a challenge for the entire industry," he said.

He said people are reporting better reception with this phone than previous releases.

10:18 a.m.

Only 0.55%  of all iPhone 4 users have called about antenna or reception, Jobs said.

10:19 a.m.

"This doesn't jibe with what you read about this problem," Jobs said.

AT&T, the largest reseller of Apple phones, has buyer's remorse period. But AT&T return rate of iPhone 4s is 1.7% compared with 6% for iPhone 3GS, the bestselling iPhone in history.

"Hard data just a few days old," Jobs said.

10:22 a.m.

AT&T gave Apple the early call-drop rate three days ago. AT&T logs the call drops to improve network. Apple can't give out the absolute call-drop data. iPhone 4 drops more calls than the iPhone 3GS. By how much? Less than one additional call per 100.

Even less than one is too much for us, Jobs said.

Jobs has a pet theory. Apple did not change the design when it introduced the iPhone 3GS. The iPhone 4 has a new design, and people are not buying the bumper cases. Only 20% of the people walking out the door have a case. Apple is going to pursue that.

"We believe the antenna is superior," Jobs said.

10:26 a.m.

Jobs is summing up his talking points.

We are waiting to hear what Apple plans to do about the reception issue.

"It's hard to escape the conclusion that there is a problem but that problem is affecting a very small percentage of users," Jobs said. The problem is inherent in every smart phone, he said.

Jobs said he has gotten 5,000 e-mails from users who say their iPhone 4 works perfectly.

10:28 a.m.

Jobs said the situation has been blown out of proportion, but Apple cares.

So Apple released its fix and recommends every iPhone owner update to it.

Apple is going to give everybody a free bumper case.

10:30 am.

Apple will give a refund if you bought a bumper and a free case for every iPhone 4 bought through Sept. 30.

But Apple cannot make enough bumpers. So Apple will give users a choice of bumpers. Users apply on the  website starting late next week. Pick a case and Apple will send it to you.

10:31 a.m.

If a user still is not happy, he or she can return the undamaged iPhone 4 for a full return.

"We are going to take care of everybody," Jobs said.

10:32 a.m.

Now Jobs is updating on other stuff. White iPhones shipping at end of the July. On July 30, Apple is going to bring the iPhone to 17 more countries including Australia, Italy, Singapore and Switzerland.

10:33 a.m.

"We love our users," Jobs said. "We make some pretty interesting products for them. ... What motivates us is just to have them love them."

Jobs: Apple has 300 Apple retail stores with "genius bars" at no cost. More than 60 million people in stores last year.

"When we fall short, we try harder," Jobs said. "When we succeed, they reward us by staying our users. And that makes it all worth it."

Jobs said Apple takes it personally when people criticize the company.

"We have been working really hard for the last 22 days to understand what the real problem is so when we solve it, we really solve it, rather than put a Band-Aid on it," Jobs said. "We have gotten to the heart of the problem: Smart phones have weak spots."

Apple just made the problem more obvious with its new design, Jobs said.

"The data supports the fact that the iPhone 4 is the best smart phone in the world," Jobs said. "There is no Antennagate."

10:38 a.m.

Tim Cook and Bob Mansfield join Steve Jobs on stage to take questions.

Question: Steve, how's your health?

Jobs: I am doing fine. I was doing better earlier in the week. I was having a vacation in Hawaii.

Question: Considering change in antenna design?

Jobs: We're happy with the design.

"I don't know what our next antenna design will be. Maybe our wizards in the antenna lab will come up with something even better. We are not feeling right now that we have a giant problem to fix."

10:40 a.m.

Question: Trying the Steve Jobs death grip on BlackBerry, still have four bars.

Jobs: We are not in a weak cell spot.

Question: Grip showed is a whole hand lock on phone. You can touch that area on the phone, it does it. The case will solve the problem. But how [do you] account for the problem?

Mansfield: Your body is an effective signal absorber. When you deeply grip the phone, attenuating the signal. None of us builds a phone anymore with the large walkie-talkie style antennas. Too inconvenient.

Question: Mr. Jobs, were you told about the concerns?

Jobs: You are referencing the Bloomberg article? It's a total crock. We have debates about everything.

10:44 a.m.

Question: Many investors were hoping to hear an apology because of what has happened to the stock. Are you willing to make an apology.

Jobs: You know. (Pause) Most customers think it's the coolest thing they have ever owned. Then there are some customers who are having problems with their iPhone 4s. I apologize to them. We are going to do whatever it takes to make them happy. ... As far as investors go, we want investors who are in Apple for the long haul and who are investing in Apple because of the character of the company, not because of the piece of news that just crossed the wire. No, I have no apology.

10:46 a.m.

Question: Does Apple make users choose between form and function.

Jobs: No.

Question: Can people get out of their contracts?

Jobs: I believe so, yes.

10:49 a.m.

Question: Could have lowered expectations?

Jobs: I have thought about that a lot...We could have pointed out that our phone had a weak spot like other smart phones... But the fact is...that most smart phones seem to have the same characteristic as the iPhone 4. When you grip them in a typical way, they lose signal strength. ... It's not possible to make a smart phone that doesn't have weak spots...You could make a big Hummer where you can't even get your hand around it, but nobody would want to buy it. ... The press that surrounded this, maybe everybody thought we were perfect, and they saw this as an example where we weren't and it was fun to jump on this. ... We are human and we make mistakes sometimes. We don't know everything. But we figure it out pretty fast and we take care of our customers. ... We do not take them for granted.

10:52 a.m.

Question: What happens to the free bumper after Sept. 30?

Jobs: Just a chance to say we will reevaluate this in September. Maybe we will continue it, maybe we will have a better idea.

Question: Does this only apply to bumpers from Apple?

Jobs: There are almost no third party cases out there. The number are small. We are not going to refund that. ... It's a very small number. ... As a consumer electronics manufacturer, if we tell the world what our future products going to be, they tend to stop buying our current products. If they stop buying current products, we have a crisis and have to focus on that and we have to stop developing new products...In general, we don't tell a people about new products until they are ready to go...If we gave things to case vendors, they have a tried and true history of putting them on the Web as well. That's what we run up against...We would rather keep new products quiet until they are ready...The case vendors haven't had a history of helping us do that. It's a conundrum. There is no easy answer. If people want to write us and let us know, we will consider that on a case-by-case basis.

10: 54 a.m.

Question: Do any of you carry your iPhone 4s with a bumper?

(Laughter)

Jobs: I got reception with iPhone 4 in my house like never before. (Says he lives in a brick house)

Question: What have you learned from this experience and what would do differently next time?

Jobs: I don't know yet. I think we need to get a little distance from things. I can tell you one thing. (Pauses) Some things I think we know that we didn't need to learn here. One is how much we care about our customers and how much we are going to take care of them. In our minds, that has never been in doubt. We were stunned, upset and embarrassed by the Consumer Reports stuff that came out this week ... We're an engineering company. We think like engineers. We create stuff like scientists and engineers. We think it's the right way to solve real problems, hard problems. That's not going to change at all. ... Some people have wanted us to run a little faster. I don't think we could run any faster... People have been living here for the last few weeks ... to get to the root cause of the matter. One of the things I have learned is that it's just human nature when someone or some organization gets really successful, someone wants to tear it down. I see it happening to Google ... Google has invented stuff we love to use ... Do you not like innovating in America? ... What about this has gotten you so riled up? ... Sometimes in search of eyeballs for these websites, people don't care what they leave in their wake. This is a new phenomenon. I look at this and say, 'Wow. Apple has been around for 34 years. Haven't we learned the credibility and trust from some of the press to give us the benefit of the doubt for our motivations and for our ability to solve problems and help our users? ... I am not saying we are not at fault. ...We didn't understand we were painting a bull's eye on our phone ... We were not just innocents in this. But the reaction in our opinion based on the data we have has been so overblown.

11:03 a.m.

Jobs: The state of the art of the entire industry is that no one has solved this problem. Would I love Apple to be the first? I would.

Question: Did you consider a recall?

Jobs: Nothing is off the table. The way we work is to be data driven. We want to find out what the problems are. We sent people all over this country to visit customers. I get e-mails ... I dispatch e-mails to engineering leaders, sent teams to Denver, Miami, Seattle. Visit people in their homes. They bring test equipment. Take logs from phones to figure out what's going on. We are really serious about this.

Mansfield: For the record, we told them we were coming.

Jobs: And we did not bash down any doors.

(Laughter)

11:08 a.m.

Question: Rate of return?

Mansfield: Almost not measurable.

Question: There's a report talking about software fix. Is there a possible software fix? Or is this hardware and nothing else?

Jobs: What's this?

Question: Dropped signals.

Jobs: Again spent the last hour demonstrating (that iPhone 4 doesn't really drop more than iPhone 3GS). The data doesn't support your perception.

Now Jobs is debating the question with the reporter from Engadget.

Scott Forstall has taken a mike to respond to the question, disputes the premise of the article in question.

Question: Will there be any change in messaging as roll out iPhone 4 in other markets [begins]?

Jobs: No. ... We can't make them fast enough. ... Sometimes reminds you of joke in Woody Allen movie: "God the food here is so bad and the portions are so small."

11:12 a.m.

Question: What [is the] impact on the bottom line from giving away bumpers?

Cook: Will give guidance next Tuesday when announce third-quarter results.

Question: Impact on sales from Consumer Reports article?

Cook: Steve said sold over 3 million.

Jobs: Most successful product launch. Demand well beyond what [we're] capable of selling.

Cook: We are selling every phone we can make.

Question: Addresses congestion problem, didn't get better with iPhone 4. (The reporter asking the question is John Markoff of the New York Times who hails from San Francisco.)

Jobs: When AT&T wants to add a cell tower in Texas or somewhere, it takes them about three weeks to get approval in [a] typical community. When want to add in San Francisco, it takes an average of three years ... AT&T has to expand their networks and they can't expand networks beyond a certain point unless [they] put up more antennas and putting up antennas in certain communities is a long process. ... They are trying and they are trying really hard.

11:21 a.m.

Nearing the end of press conference.

Question: You have been communicating more with your users. In this case, your communication is helping Apple address this issue. Have you shifted the way you communicate with Apple users?

Jobs: I always have upon some occasions replied to them, these are our users. I can't reply to all of them, I have a day job. Some people have posted them to the Web, which is a little rude. And the latest phenomenon is that some people are making them up. So don't believe everything you read.

Question: Will the free bumper offer extend outside the U.S.

Jobs: Yes.

Jobs is thanking everyone for coming.

And that's a wrap.

-- Jessica Guynn

 
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