Seeking to quell the fuss over reception on the new iPhone, Apple is applying a low-tech solution to a high-tech problem. The California gadget-maker is hoping a 29-dollar rubber-and-plastic case will put an end to the debate over the antenna on what Apple chief executive Steve Jobs calls "perhaps the best product we've ever made."
The bumper, which fits around the sides of the phone, will be offered free to all buyers of the iPhone 4 through the end of September, and customers who have already purchased the case will be reimbursed.
Abhey Lamba of the International Strategy and Investment Group said the financial impact of the expense would be "fairly insignificant" to the company behind the Macintosh computer, iPod, iPhone and the iPad.
"Assuming the cost of distributing a bumper to be about five dollars per unit and the number of bumpers as 10 million, total cost to the company could be about 50 million dollars," Lamba said.
Noting that Apple has sold more than three million iPhones in just three weeks, Lamba also said "clearly, the antenna issue has not made any dent in demand for the new phone."
"We expect the strong momentum to continue," said said, estimating that Apple will sell 37 million iPhones in fiscal 2010 and 44 million in fiscal 2011.
The iPhone 4 has been bedeviled with complaints about dropped calls from the moment it appeared on store shelves three weeks ago.
Some iPhone 4 users claimed they lost reception when holding the lower left corner of the phone -- whose unusual antenna wraps completely around the device -- in what has been referred to as the "death grip."
Consumer Reports, the influential product review magazine, said it could not recommend the device because of the problem, forcing Jobs to cut short his Hawaii vacation and return to San Francisco to address the controversy.
The Apple chief said the whole issue had been "blown so out of proportion" but apologized to any customers who experienced problems and offered the free cases as a fix.
"A lot of people have told us the bumper solves the signal strength problem," Jobs said at an event held at Apple headquarters to address "Antennagate." "OK, so let's give everybody a free case."
Jobs acknowledged "there's a problem" but stressed "it's affecting a small percentage of users and some of that problem is inherent in every smartphone."
"We're not perfect," he said. "Phones aren't perfect either."
Jobs acknowledged the iPhone 4 drops slightly more calls than the previous model, the iPhone 3GS, but said said other smartphones also drop reception if held in a certain way.
"It's certainly not unique to the iPhone 4," he said. "Every smartphone has this issue."
Gartner analyst Charles Smulders said problems such as those experienced by Apple are to be expected by firms operating on the cutting-edge.
"There are inherent risks when any company pushes the design and technology envelopes," Smulders said. "Apple pushes very hard on both fronts."
"I don't think they've had a lot of serious product issues over the years," said Mike McGuire, another Gartner analyst, adding that he expects the issue to blow over.
"From a consumer perspective, they've now told me how this is going to be dealt with," he said. "And they even said if I'm really still unhappy, I can return it.
"You can't ask for much more than that."
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