In response to the uproar over spotty reception for new
One takeaway: Buyers of the iPhone 4 will be getting free cases to help prevent users' grip on the phone from weakening the signals carrying conversations. Jobs said Apple cannot make enough of the bumpers that some people have been buying, so it is working with third parties to get the cases for users.
If you're still not happy, Jobs said, "you can bring your iPhone back within 30 days for a full refund."
Apple was holding an invite-only press conference to talk about its fast-selling iPhone, which has also been the most controversial, given what many believe to bethat leaves its users with dropped calls.
You can find our. You can also read a copy of our live updates from reporter Josh Lowensohn (with occasional color commentary from Tom Krazit), or replay CNET's live coverage of the event (including hand-selected reader questions and comments) in the CoveritLive module below.
9:51 a.m. PDT: Hi everybody, we're about to get in the door. Hang tight.
10:03 a.m.: Apple's Marketing VP, Phil Schiller, is in the house.
10:04 a.m.: Room is actually 3/4 full. Very select group of folks here. Either that, or not everyone could get plane tickets in time.
Video starting now about the iPhone Antenna. You can watch it at http://www.youtube.com/watch?v=VKIcaejkpD4
10:06 a.m.: Steve Jobs is now up on stage, saying he saw the video on YouTube and had to share it. "We would love to answer your questions today." He's going to do a 15-minute presentation first.
10:07 a.m.: "We're not perfect, phones aren't perfect. But we want to make all our users happy."
The iPhone 4 has sold over 3,000,000 units since launching last month.
10:09 a.m.: Jobs is talking up the iPhone 4 as being highly reviewed and loved by users. "However, we got reports about users having troubles with the antenna system...the problems they were saying...people were touching the 'x marks the spot'...this had been judged 'antennagate.'"
Jobs says it's only been 22 days since launch, and that "we've got some of the finest scientists in the world...we want to find out what the real problem is before we find the solution...we've been working our butts off for the past 22 days to find out the real problem and the real solutions."
10:11 a.m.: Jobs says all phones have problems with antenna reception, and is now going into a demo of how range is affected with various smartphones, starting with a BlackBerry.
10:12 a.m.: Next, HTC Droid Eris. Jobs: "The time it takes for the bars to go down depends on the algorithm."
10:12 a.m. (Tom Krazit): No surprises so far. They're trying to shift the debate away from the iPhone and onto antennas in general.
10:13 a.m.: Now showing the same thing happening to the Samsung Omnia 2. Same thing is happening there too. Jobs says the signal drop is immediate, but depending on the algorithm it can go down or up faster.
10:14 a.m.: Phones were tested in areas of weak signal strength. Jobs says this is "life in the smartphone world" and that "every phone has weak spots."
10:15 a.m.: Jobs: We went to a lot of trouble to show people where you can touch the antenna. "You might as well put a red flag there."
That combined with the bad algorithm was problematic, Jobs said.
10:17 a.m.: Jobs is now explaining how testing is done at Apple using padded rooms to test for antenna reception. Apple has 17 of these "anecohoic chambers." Jobs says it's been a 100 million-dollar investment, and has 18 PhD scientists and engineers on staff to test for these things.
"We didn't think it would be a big problem because every phone has this issue," Jobs says.
10:17 a.m. (Tom Krazit): There's a joke about Apple employees and padded rooms here somewhere.
10:19 a.m.: "People are reporting better reception with this antenna than any other smartphone before."
"What have we learned?" Jobs asks.
-Smartphones have weak spots.
-AppleCare data has been telling. Jobs says problems are logged.
Jobs says percentage of users who have called about antenna or reception issues is 0.55%.
"Historically for us, this is not a large number," Jobs says.
10:20 a.m.: Jobs: The third specific: AT&T return rates. AT&T and Apple have a 30-day buyers remorse policy.
10:21 a.m.: Jobs now going over AT&T return rates for shipments. Comparing the iPhone 4 to the iPhone 3GS. For the 3GS, the return rate was 6%. For the iPhone 4, Jobs says it's 1.7%.
10:22 a.m.: Jobs: "Returns at the largest iPhone reseller [AT&T], are a third of what they are for a phone that was regarded as spectacular a year ago."
10:23 a.m. (Tom Krazit): Jobs is being quite defensive here, but I still think we're building to a "But we want to make our customers happy..." moment.
10:23 a.m.: Jobs is now detailing AT&T call drop rates. "We cannot give out the absolute call drop data," but Jobs is giving us the "delta to the iPhone 3GS."
10:24 a.m.: Jobs says the iPhone 4 calls drops more calls than the iPhone 3GS.
10:25 a.m.: How many more, though? Jobs says it's less than one additional call per additional 100 calls (compared to iPhone 3GS).
Jobs says even less than one is too much for Apple.
10:26 a.m.: Jobs now saying he has a theory on why this is happening. Jobs says the new design on the iPhone 4 was not shown to anybody, so there were no cases. Cases fix the issue, so when people bought the 3GS, they could buy a case right away.
20% of customers are going out with a bumper case.
10:28 a.m.: Jobs: When our engineers look at this data, it's hard not to admit there's a problem.
5,000 users e-mailing Jobs saying it works for them perfectly, so what's all this fuss about?
Jobs is saying that even with the data, this has been "blown way out of proportion."
10:29 a.m.: Jobs is going over what's being done to fix the problem. Highlighting iOS 4.01, secondly "the bumper solves the signal-strength problem"--give everybody a case.
Jobs: OK great, let's give everybody a free case.
10:30 a.m.: Apple is giving everyone bumpers.
10:31 a.m.: Those who already bought will get a full refund. This will go on through late September, Jobs says.
Jobs says Apple cannot make enough bumpers, though. Apple is working with third parties to source free cases for users. This entire program will work over the Web.
If you're still not happy, Jobs says: "You can bring your iPhone back within 30 days for a full refund."
10:32 a.m. (Tom Krazit): It will be interesting to see if Apple has to tell investors how much they'll have to spend on this fix for the problem, they might not depending on how much it really costs.
10:32 a.m.: Jobs is now giving other updates.
-We're tracking problems with the proximity sensor. Jobs says this affects a small number of users. It will be a software fix, he says.
-White iPhone 4 shipping to users at the end of July.
-On July 30, Apple will bring the iPhone to 17 more countries.
10:33 a.m.: Jobs: "We love our users. We try hard to surprise and delight them. We work our asses off and have a fun time doing it."
10:35 a.m.: Jobs is now continuing to talk about "love for users," listing off benefits of the company's 300 Apple retail stores. 60 million people came through Apple's retail stores last quarter. "We do all this because we love our users. And when we fall short, we try harder. We pick ourselves up, and we figure out what's wrong, and we try harder."
10:36 a.m.: "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," Jobs says.
"Smartphones have weak spots, we make ours extremely noticeable."
10:37 a.m.: "That's everything we can do to make every customer happy, but the data supports the fact that the iPhone 4 is the best smartphone in the world. There is no 'antennagate,'" Jobs says.
10:38 a.m.: "And that's what I had to present to you today," Jobs says. Tim Cook and Bob Mansfield are now joining Jobs up on stage to answer questions.
10:39 a.m.: Q: How is your health, Steve?
A: Jobs: I'm doing fine, earlier in the week I was having a vacation in Hawaii, but I decided this was important enough to come back to.
Q: Besides the refunds, are you considering any changes?
A: Jobs: We've been pretty unhappy with this, and we're pretty happy with the antenna design on the iPhone 4. The iPhone 3GS has the same problem--so if we were to fault the iPhone 4 antenna, we waved a red flag in front of a bull.
10:40 a.m. (Tom Krazit): Bob Mansfield is head of hardware development at Apple, for those who were wondering.
10:40 a.m.: Jobs: "I don't know what our next antenna design will be. Maybe the wizards in the antenna lab will come up with something better. I don't know."
10:41 a.m.: Q: Is this more of a PR issue then?
A: Jobs: If we could do this all over again, we would have come up with some mitigation so that if you gripped it in a certain way, you wouldn't have a problem.
10:42 a.m.: Q: What you demonstrated with the various phones dropping calls was full-on grip. But what we've been seeing online is just touching the bridge. Can you account for how exactly that happens?
A: Mansfield: When you make contact with the phone, you put your body between the phone and the signal sources it's trying to see. Your body is a pretty good blocker of those signals. The fact that you bridge that gap between the antennas is a way to block the signal. When you grip it harder, you attenuate the signal much stronger.
10:43 a.m.: Mansfield suggests that you could build an old school external antenna, but nobody does that anymore.
10:44 a.m.: Q: Were you told about this issue before the device shipped?
Jobs: Are you referencing The Bloomberg article? It's a total crock. We've tried to get them to provide more proof than just rumors, and they couldn't.
10:45 a.m.: Jobs: "Everybody at Apple wants to build a great phone, and we argue about what great is. The motivations are all there, but what was portrayed in this article were untrue.
Rubin [Caballero, an engineer and antenna expert who Bloomberg said had informed Jobs of the problem] says it's total bulls*** too."
Jobs: For investors who bought the stock and it's down $5 I'm not going to say I'm sorry. We make great products, and if we hit a bump in the road...it's just like having kids.
10:47 a.m.: Q: Is Apple a company who makes users choose between form and function?
Jobs: No, we do both. We strive as an example to make our products a really great size. It's so wonderfully thin, and it cost us extra to do that, but we work harder to make it cost not that much more. Retina display is being widely regarded as the best screen on the market.
10:48 a.m.: Jobs: It cost a little more, and we had to work a little harder to bring it into reality, but now our users enjoy it. The antenna is an external antenna, and we did that so there would be more space inside for things like the battery. We try to have our cake and eat it too--great design, and great performance. And if you look at our products, that's what we deliver.
Q: What about AT&T contracts on the refunds?
A: Jobs says yes, people can get out of their contracts with the refund process.
Jobs: We didn't understand there would be these kinds of problems. I don't know what it is we could have said. Maybe we could have set the expectations appropriately that most smartphones have weak spots, and we could have pointed that out. We could have shipped the phone with a better algorithm so the bars wouldn't shift so dramatically if you held it in a certain way.
I'll just say, most smartphones have the same characteristic, which is that if you grip it in a normal way, there is signal loss, especially if you're in a weak signal area.
Part of what we're learning is our role as one of the leaders in the smartphone industry to educate. And to do that, we need data. And that's what we've been researching for the past 22 days.
10:51 a.m.: Jobs jokes that making the phones bigger with large antennas would solve the problem. "Some of these guys are making Hummers...you could make that, but nobody would want to buy it."
10:52 a.m.: Jobs: "We don't know everything, but we try to figure it out pretty fast."
10:53 a.m.: Q: After September 30, does the deal on the free bumpers expire?
A: "Jobs, no--when we get to that point we'll reassess. Stay tuned.
Maybe M&Ms comes out with a little band-aid sticker that you can put on your phone and it makes it better."
10:55 a.m.: Q: What about refunding third-party cases?
A: Because we haven't shared our design ahead of time, there are few cases. So a small number of people walked out with a third-party case.
Q: What about if they had a receipt?
A: It's simple. As a manufacturer, if we tell our customers what our future products will be, they tend to stop buying our current products. As a result, we have a crisis around that, which takes the focus away from developing new things.
Sometimes Web sites buy stolen prototypes and put them on the Web. We don't care about that. Likewise, giving designs to third-party case makers tends to result in the same kind of problems.
10:57 a.m.: Jobs re: people who bought third-party cases before this announcement: If some of those people want to write us and let us know, we'll evaluate that on a case-by-case basis.
Q: Do you carry your cases without a bumper?
A: (All three hold up their phones--all without bumpers)
11:00 a.m.: Q: What have you learned from this launch that you might do differently?
A: Jobs: I don't know yet. One thing I guess I've learned. [long pause]
Some things I think we learned, we already knew. We know how much we love our customers, and how we work to take care of them. In some ways we were stunned and embarrassed by this--things like the Consumer Reports study that came out put things in perspective.
But it's taken us a while to get the data--we only got the call drop data three days ago. If we had done this even a week ago, we wouldn't have half the data we have to share with you...and in another few weeks we'll have even more.
Jobs: "Some people have wanted us to run any faster...I don't think we could.
I've seen cars parked out in the parking lot all night. We've had cots in the engineering department...I don't know if we could have worked harder."
When companies get big, people want to tear them down. I've seen it happen to Google...and now I've seen some of those people jumping on us. Would you rather we're Korean companies than America? Would you rather we weren't here in America, and innovating the world like we do? Of course we're human, and of course we make mistakes. And sometimes I feel like in the search for eyeballs on these Web sites, they don't care about the wake they make. That's a relatively new phenomenon.
I look at this antennagate, and think "Wow, Apple's been around for 30 years. Haven't we earned the credibility from the press to earn the respect and trust?" I didn't see that this week---I'm not saying we're not at fault."
Jobs: We would love to know--how can we do better at this?
11:04 a.m. (Tom Krazit): Very defensive. He's right about the "build-it-up-tear-it-down" thing, but I'm surprised that he's surprised about how this spun out of control.
11:04 a.m.: Q: Is there a hardware redesign in this generation of the iPhone 4 that would fix it? Do you plan to do that?
A: Jobs: What I'm saying is that you can go on the Web and find pictures of phones that ship with stickers that say 'don't cover this' or 'don't put your finger there.'
We've shown you three good, popular phones that do the same thing.
Jobs: Can we make our situation better than it is right now? Maybe. We'll see. But our situation right now is that most of our customers aren't experiencing this problem--they're experiencing it in a test circumstance where they're doing what they saw on a YouTube video and saying 'Oh my god!'"
Jobs: We will continue to work on more advanced antenna design that solve this problem, or simply move that problem spot to another place.
11:07 a.m.: Q: Did you consider a recall?
A: Jobs: When you love our customers as much as we do, nothing is off the table. But the way we work is to be data driven. We want to find out why the user is experiencing these problems.
Jobs says after users have sent angry e-mails he's sent engineering teams to Denver, Miami, Seattle to investigate user claims.
"We try to find out the truth of the matter, and do whatever it takes to satisfy our customers."
Mansfield: For the record, we told them we were coming.
Jobs: And we didn't bash down any doors.
11:08 a.m.: Q: What have the return rates been at Apple stores?
A: Cook: It's been small. Extremely small. Smaller than the numbers on the board. The rate for return on this product is small.
Q: Was it better/worse on the iPhone 3GS?
A: Cook: Can't track that, because this problem didn't come up with the 3GS.
11:10 a.m.: Q: Report in the Times talking about a software fix that was different than just adjusting how the bars were displayed.
A: Jobs: We just got through spending the last hour, showing you with data, that the iPhone 4 drops less than one more call per 100 than the 3GS, so when you talk about all these dropped calls, I believe there are some users that are experiencing lots of dropped calls. Whether they're in a low signal area, whether they have a defective phone...I don't know why, but we want to make it better for them.
Q: No, an antenna attenuation problem.
A: Jobs: Let me replay this question back to you--are you asking whether we could solve a hardware attenuation issue with software? No.
A: Scott Forstall (iPhone software VP) is up now saying that kind of problem can't be fixed with software. He calls the "latent bug" mentioned in the NYT article "blatantly false."
11:13 a.m.: Q: Will there be any changes in strategy on worldwide roll-out?
A: Jobs: no.
"This antennagate issue has been predominantly a U.S. issue...a lot of the feedback we've gotten on that has been from the U.S."
"The second biggest angry customer e-mails we've gotten have been from customers who can't get one."
11:15 a.m.: Q: What kind of impact do you think this will have?
A: Tim Cook: We'll be announcing our Q3 results next Tuesday. We'll go into detail on that then.
Q: Can you give a sense of whether there's been a slowdown because of this, or the supply?
A: Jobs: We were able to build off a large supply. But the run rate was not able to catch up with the 1.7 million per week...
Tim Cook: We are selling every phone we can make right now.
11:17 a.m.: Q: I'd like to know if the handset has any role in congestion management on AT&T.
A: Jobs: When AT&T wants to add a cell tower in oh Texas or somewhere, it takes 3 weeks to get approval in a typical community. To get a cell phone tower in San Francisco, it takes something like 3 years.
None of us want a cell tower in our backyard...that is the single biggest problem keeping more towers from going up.
11:20 a.m.: Q: Two years ago you came out with software for the iPhone that improved the signal. But from the beginning there was a bug you weren't aware of. Can you explain that?
A: Jobs: To understand Apple, one of our biggest insights came about eight years ago. We wanted to own the proprietary technology...in the technology business, we thought software was the most important thing. About eight years ago, we thought it was going to shift from hardware to software being the most important thing. And it did.
The iPod really proved that to ourselves, and we brought that to the iPhone too.
11:21 a.m.: Jobs: We've been able to create and frictionlessly distribute software updates to the iPhone since day one. We've been able to improve performance, add features, and bring a better experience--all for free.
Jobs: The software fix for the bars fixes it, and does so for the iPhone 3GS and 3G as well.
11:24 a.m.: Q: You mentioned that you have been sending out engineers after getting e-mails from users. It seems like your communication has been helping this issue. Has there been a shift?
A: Jobs: I get a lot of e-mails. And I always have, on some occasions replied to them. I can't reply to all of them, because I got a day job. At some point, people started posting them online, which is rude. And even more recently people even started making them up. Don't believe everything you read.
Q: Is the free bumper going to work for people outside the US?
10:25 a.m.: Jobs: Well, thank you for coming out this morning.
I wish we could have have done this for you in the first 24-48 hours, but then you wouldn't have had as much to write.
10:26 a.m.: And that's it folks. Thanks for picking CNET this morning, we know you have lots of places to get live news coverage.