Apple is hosting a press event at its headquarters in Cupertino, Calif. I am here with about 50-odd media folks, waiting for Steve Jobs and other Apple executives to show up for the conference. Actually, the townhall isn’t as full as you would expect — in […]

Apple is hosting a press event at its headquarters in Cupertino, Calif. I am here with about 50-odd media folks, waiting for Steve Jobs and other Apple executives to show up for the conference. Actually, the townhall isn’t as full as you would expect — in other words, let’s not expect much.

10:04: They are showing a video called the “iPhone Antenna Song.” Dismissing all the noise as a lot of hoopla.

10:06: Steve Jobs is out and is saying he is going to make a 15-minute presentation and then will take questions.

Steve says: We are not perfect. Phones are not perfect. We want to make all our users happy. We love to make our users happy and that is what drives us today.

We have sold 3 million phones in three weeks. This is the best smartphone we have built.

Gizmodo showed the video and we got what others are calling an “antenna-gate.”

We have been working our butts off for 22 days to figure out and fix what is wrong. I think we learned that antenna-gate is not unique to iPhone.

10:12: Jobs is showing videos of other phones that lose their signal. Blackberry Bold 9700 — 5 bars to 1. HTC Droid Eris goes down to zero. If you take your hand away from where there is an antenna weak spot, it goes down. Showing Samsung Mobile phone with Windows.

Jobs: Most smartphones have that problem and we have that as a challenge, which the entire industry faces. Takes a dig at Gizmodo — described as “a certain site.”

Jobs: We screwed up with our algorithms. We got a sophisticated antenna lab and we are looking at antenna reception from all angles. Says Apple has spent $100 million in antenna lab with 18 Ph.D. scientists and engineers. We didn’t think this would be a big problem. All smartphones have that problem.

Jobs: What we have learned is smartphones have weak spots, not unique to iPhone 4. All smartphones have weak spots and you will drop calls. AppleCare data shows that 0.55 percent of all iPhone 4 users have called about antenna or reception. If you read all these articles, half our customers have called and are angry. One half of one percent — 0.55 percent! Historically, this is not a large number. Doesn’t jive with what you read about this problem.

10:20: What are the return rates on AT&T for iPhone 4 and compared with iPhone 3GS. iPhone 3GS had a return rate of 6 percent, below the smartphone average. From the articles you would read, half the people might be returning the iPhone. The hard data says 1.7 percent.  That is a third of iPhone 3GS. That is returns at our largest iPhone 4 reseller.

10:22: AT&T call drop rates — when compared to additional calls dropped per 100 calls compared to iPhone 3GS, iPhone 4 drops less than one additional call per 100 when compared to the 3GS.

10.25: Jobs: We can’t make enough bumper cases.

10:28: Jobs: We think there is a problem and it is affecting a small percentage of users. We care about every user and we are not going to stop till every customer is happy.

10:29: Jobs: It is all blown out of proportion.

10:30: Release iOS 4.01 which fixes the bars and Exchange issues.

10:31: Jobs: Free case for every iPhone 4 and giving it away through September. We are giving them away, but can’t make enough. So we are going to send you another case from our website and, if you are still not happy, you can get a full refund within 30 days of purchase. No restocking fee. We want everyone to be happy.

10:32: Shipping white Wi-Fi phones by end of this month in limited quantities. Will introduce the iPhone 4 in 17 countries, slight delay in South Korea.

10:33: Jobs: How we operate and how we make decisions … We love our users and we work our asses off to delight them. We make some interesting products for them. There are 300 Apple stores across the world. 60 million people in the stores during the last quarter. When we fall short, we try harder.

Jobs: And when we succeed users reward us by staying our users. That is what drives us. When people are criticizing us, we take it very personally. When users have a problem, it is our problem. We have been working for 22 days to figure out the real problem and then solve it. Instead of putting a band-aid, we want to fix the real problems.

Jobs: There is no antenna-gate, there is a challenge for the entire industry. We are dedicated to fixing that and that is in the future.

10:37: Tim Cook and Bob Mansfield join Steve Jobs on stage for Q&A.

Q: How are you Steve? How is your health?

A: I am doing fine. I was having a vacation in Hawaii and it was important enough for me to come back.

Q: Will you change the antenna design in the future?

A: We are busy with this problem. The touch-me grip made it obvious for the iPhone. We are getting reports that it is a lot better than iPhone 3G. Maybe our wizards in the antenna may come up with something new. Right now it is not something we are considering.

Q: Is this a PR problem?

A: If we could do this again, we would have tried to mitigate the problem.

Q: Were you told about the design concerns by engineers and did they talk to you?

A: Bloomberg article is total crock. We have challenged them to prove beyond rumors. The best ideas win here. Healthy debates in this company. We debate how to tie shoe laces. We argue about what great is. Reuben said it is total bullshit.

Q: Apology to investors, considering what happened to the stock. Are you willing to make that apology?

A: There are some customers who are happy. There are some customers who are not happy. And I apologize to them and we are going to try and make them happy. We want investors who are in it for the long haul and are for the character of the company, not investors who saw us across the news on the wire.

Q: Do you make people choose between from and function?

A: No. We try and make our products a great size. iPod Touch is thin enough to fit in your pocket. Retina display is the best electronic display ever created. It cost a little more and ramp up productions. We like great design and great performance.

Q: AT&T plans canceled?

A: People can return the phones and get out of their AT&T contracts.

The problem is that we didn’t understand that there would be these problems. I don’t know what it was, what we could have said. We could have pointed it out. Right now, it is not possible to make a smartphone without weak spots. You can make a Hummer that you can’t get their hand around it. We are advanced smartphone. Antenna design that is smarter than most. Everyone thought we were perfect and saw that it was a chance to jump on us. We are not perfect. We are human. We make mistakes. We take care of our customers. We appreciate them and we don’t take them for granted.

Q: September 30 limit?

A:  Maybe we have a better idea. We will re-evaluate in September.

Q: Is the free bumper offer for devices that were bought from Apple?

A: We will not replace third-party cases. If I tell the world our products, what are our future products, they stop buying our current products. It has a whole bunch of negative consequences.

Q: What have you learned?

A: I don’t know yet, we need some distance. One thing we didn’t need to learn — how much we love our customers. We were embarrassed by the Consumer Reports stuff that came out. We didn’t need to hear that to take care of our customers. We have been in the labs to figure things out.

We are an engineering company and we think like engineers and scientists and solve hard problems. It is operating like more.

We can’t run any faster. Cars in parking lots. I don’t know how we could be working harder. One of the things I have learned is that it is human nature: when a group or an organization gets successful, people want to tear it down. People are doing that to Google. It is a great company. Some people are jumping on us. You want us to be Korean companies and not be an American company. You don’t want us innovating here. Of course we are human, we make mistakes.

In search of eyeballs, people don’t care what they leave in their wake. Antenna-gate … in 34 years haven’t we earned trust and get benefit of the doubt? I am not saying we are not at fault. We are not just innocents in this.

Q: Will there be a hardware redesign to solve this problem? Will you do it in this generation.

A: What I am saying is that, you can see videos of phones with stickers that show don’t search there. We are not saying all our customers experiencing this problem and for those customers who are experiencing it, we want to get them a case or a new phone. Working on a new antenna design and working hard on this.

Q: Is there a software fix for the attenuation problem? (Question is based on the New York Times article this morning about a possible software fix.)

A: Is there a software fix for smartphone attenuation problem which impacts all smartphones? Can we leapfrog them? I would love that.

Q: Any change in iPhone 4 messaging in 80-plus markets around the world?

A: The antenna-gate is predominantly a U.S. problem and most of the feedback is from the U.S. We will market as planned. We can’t make them fast enough. We are way behind demand. Sometimes it reminds of a joke in a Woody Allen movie — food is so awful and the portions are so small. We are selling every phone we can make.

Q: Financial impact?

A: It will be announced during our conference call after the earnings.

When someone owns the primary technology, they are going to beat you on it. In computer business, software was the most important thing. The big insight we had was that software was going to be very important. We are pretty good at making software for iPods, PCs and the cloud and making them work together. We brought back to the phone business. Other pioneered, Palm. Everyone is copying Apple now.

Q: Emails? Do you write them.

A: Some people are making them up. Don’t believe everything you read. I try and reply to some of them because they are our customers.

Q: Free bumper offer outside U.S.?

A: The answer is yes.

Related GigaOM Pro research (sub req’d): Why Carriers Should Care About Customer Care

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By Om Malik

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  1. So after releasing a piece of junk defective by design cellphone, Apple holds a press conference to smear other well designed cellphones?

    What an absolute embarrassment by Steve Jobs and Apple.

    1. Maybe its not a piece of junk? I haven’t had any dropped calls, and my friends with the phone arent having problems either. So maybe this is overblown media hype?

      1. GoodThings2Life Shawn Friday, July 16, 2010

        Media is always hyping things, no doubt, but when was the last time you heard of a massive conspiracy of phones LYING about their signal quality on a carrier known to have dropped calls and issues?

        I’m here in Youngstown, Ohio and most of the iPhone4 users I know are unhappy because of the issues and none of the iPhone3GS users are unhappy (other than with AT&T or some that had botched iPhone OS4 updates).

      2. Apple overblows the hype words it uses to describe its products- “Magical..!”, “Best Ever..!”, “Borne by Unicorns..!”, blah blah blah

      3. @Tim

        Maybe you need to watch a few episodes of “Mad Men.” You know, so you can understand the concept of “advertising.”

        Or maybe you believe Verizon is totally saying its customers can become Airbenders because “Rule the Air” is apparently all right with you.

        Hey, Verizon also says Droid X “turns your eyes into captivated apertures of ecstasy. Your arms into blistering, churning pistons.”

        So really, what is your point about Apple and marketing? Or are you just trying very hard to be hypocritical?

      4. @Lava

        When an ad campaign doesn’t take itself too seriously, it turns out to be quite fun. As in: “semi-functional, giggling-brat-vanity for a bare knuckle bucket of does.” or “Its not a princess, its a robot. A phone that trades hair-do for can-do.”

        Compared to some Lysol-disinfected bubble wrap world where even the actors hold it the wrong way

        “Mad Men?” Doesn’t TV kill brain cells? Mad Men, though, is a good way to describe Apple fanbois whipped up into lemmning frenzy when God Jobs opens his mouth.

        hypocritical? huh? Apple marketing- it’s beyond ridicule

      5. Exactly!! I bought a captivate because of all the bad things I’ve been hearing about it, as it turns out the captivate was worse the gps was defective and forget about software updates who knows when that’ll come. So I returned it and got the iPhone 4 as soon as it was restocked and no issues at all. It is what it is -overhyped issues that quite frankly won’t affect how you use your phone in normal situations; and I’m a lefty but I don’t grip my phone like there’s no tomorrow I have yet to replicate the signal loss issue

    2. Always refreshing to read such insightful comments. Kathy, whether you like Steve Jobs or not, have you considered that millions of people are actually happy with their new iPhone, and that other phones might also have manufacturing defects and other problems?

      1. GoodThings2Life Robert Friday, July 16, 2010

        Yeah, of course they do, but none affecting the common ways we hold our phone. :)

      2. Robert, The iPhone4 antenna is very unlike the Toyota problem. Am glad that no one is making this comparison. But nevertheless, the brand image, which takes decades to create, can be sullied in no time.

        That the iphone4 has an antenna problem is not the issue. That Apple allowed it to be blown out of proportion is. That the brand image of Apple has not exactly come out all shining (after this much much delayed press conference) is the bigger issue.

        Doesn’t matter if all other phones in the market have this problem. They are not the iPhone4s. (Actually am a bit surprised by SJs claim – that all smartphones in the market have this problem. Doesn’t that include iPhone1, 2, 3 as well?)

        Apple’s claims at perfection and consumer care are both dented. Will take years to overcome.

        Another point: Steve’s reference to being an American company and not a Korean company says something. Wonder why nobody latched on to this (yet).

    3. Junk?

      Why have 99.5% said NOTHING to Apple at all about ever having any ‘antenna problem’?

      I just fixed mine with a simple $4 case from ebay

      1. GoodThings2Life Susan Friday, July 16, 2010

        Umm, I think you mean 99.45%… and that’s still assuming you can trust Apple’s figures.

      2. Never believe statistics from companies. 0.55% have called – this excludes everyone who simply returned their phone without calling, or who went to an Apple store for support, or went to the forums for support (the forums, where, btw, Apple routinely deletes anything anti-apple) 1.7% returns – returned to whom? To Apple stores? To AT&T stores? To both? he doesn’t quantify. That could be the number of returns to a single Apple store.

        I’d like to see some real numbers – not statistics.

    4. Haven’t had any problems with the “piece of junk defective by design cellphone.” In fact, using it is delightful. About 3 million other people share my opinion and many millions more will learn what a pleasure to use this phone is. Aside from some early issues that are bothering a relatively small number of vocal people, the reviews have been outstanding. With Apple providing a free fix to the antenna issue, Consumer Reports will likely recommend the phone and they did find it rated best of all smartphones. If you want to talk about embarassment, give your parents a call and ask them what they think of you.

    5. @kathy – it’s a hot selling item. Most folks are not having issues with iPhone 4.

      your description of it as “a piece of junk” is off base.

    6. @Kathy, be real. You’re completely ignoring the huge number of phones sold in a short time, the many positive (or even totally satisfied) comments by other posters, and the engineering data presented by Apple at the press conference. And it isn’t likely that a company with as many people watching them as Apple would lie about engineering data.

    7. troll

  2. Why is the white iPhone 4g taking forever to be sold? Apple must of knew that they had a LEMON!

    1. The antenna issue has NOTHING to do with the color of the case.

      Are you serious?

    2. Because it has bigger gee bee’s and more wifis.

  3. No matter what they do – which is more than most companies would do – people will always criticize.

  4. Hey Kathy,

    Bring your phone back and get a ‘roid (not the phone dearie)

  5. Truly … truly unbelievable.
    So much ego and vain. You do the right thing and still sound so arrogant and wrong. Sheesh … I will go with the oranges, the apples just taste funny lately.

    1. GoodThings2Life Tal Friday, July 16, 2010

      So maybe stEve is the temptress, and the millions of buyers are just a bunch of Adams?

    2. There really is no pleasing everyone. Any person, company that has success is quickly attacked at the slightest slip up, if you can call this slip up, which it’ clearly not. What is it about the human race that likes to see people fail.

      The bottom line, like it or lump it, no one is asking you to buy Apple. Its a choice. There will be millions of others, more gracious and more human ready to step in your place.

    3. What’s unbelievable is the idea that a whole bunch of Android lovers hate the idea of people loving their iPhones. And they express it by claiming anger and disgust on behalf of the millions of happy iPhone users who don’t know any better.

      1. Exactly. I’ve got an Android (HTC Desire) and I can’t wait to replace it with an iPhone 4.

      2. This comment really isn’t fair at all. The fact of the matter here is that Apple have been shown to be fallible. I’m not an iPhone user, and I’m heading straight for the HTC Desire when I get the chance, but I have no doubt that the iPhone 4 is a very sexy bit of tech.

        I think Steve’s comment that ‘all smartphones have the same problem’ is nonsense, and his sideswipe at HTC was just poor sportsmanship, but yeah, most smartphones have their fair share of issues and it would be naive to think otherwise.

        I’d like to think I’m pretty objective on this, regardless of my decision to go with HTC over Apple, so please don’t tar all Android users with the same brush. I admit I was happy to see some negative press about the iPhone 4, if only to bring the company down to earth and give them a heads up that they aren’t untouchable, but with the exception of the iPad, the only consistent problem I have ever had with Apple is their prices.

        The fact of the matter is that HTC are making products that are easily on par with the iPhone in many ways, better in some, and worse than others (as with any competing products really), and that’s a great thing for one big reason – Now that Apple have had this little shake up, the world has finally noticed that there are alternatives, and both companies are suddenly is very real competition. HTC wants Apple’s crown, and Apple knows that it needs to fight to keep it. The resulting competition ought to result in both companies raising the bar higher and faster than before. That can only be a good thing, right?

        P.S- @empireofno If you don’t mind me asking, what are your reasons for wanting to switch from the Desire to the iPhone 4? If it was just a statement to bait Android fans (hence the choice of both HTC and Android’s flagship handset) then that kinda sucks but it’s understandable in context, but if it’s genuine then I am sincerely interested in why, as from what I’ve seen there’s not much in it spec-wise. Do you just prefer the iPhone interface or is it something more than that?

  6. GoodThings2Life Friday, July 16, 2010

    So basically, what we have here is:

    Responsible Adult Users: “STOP DOING THAT, IT’S NOT RIGHT!” smacks hands

    Two Year Old Steve Jobs: “BUT THEY’RE DOING IT TOO!!!” cry

  7. Will the case offer be available at the foreign releases on July 30th?

  8. Regarding the signal attenuation comparisons with other phones:

    So for one thing, I don’t believe they indicated the service provider. I’m guessing they were all performed on AT&T.

    Either way, human bodies as big ‘ole meat bags will, by nature, attenuate radio signal. So in areas of weak signal, you’d probably be able to visually demonstrate signal attenuation on most phones by tightly gripping and covering up as much of the phone as possible.

    That said, the iPhone 4 issues appear to stem from the aforementioned “human meat bag” attenuation in addition to the exterior antenna design that allows one to unintentionally alter the resonance frequency of the antenna(by joining the other antennas).

    In other words, while some signal dropping is standard, the iPhone 4 is certainly unique. Whether this unique deficiency is enough to cause noticeable problems for most people in areas of decent coverage is another question altogether.

    1. Hardly anyone in my neck of the prairie uses AT&T except iPhone users. Android, Samsung and Nokia [barely] smartphones all exhibit the same problems.

      I’ve worked with 2-way radio communications, here, going back about14 years – mostly Motorola back then – and the problems persist. Unless you still owned a Brick.

    2. Hardly anyone in my neck of the prairie uses AT&T except iPhone users. Android, Samsung and Nokia [barely] smartphones all exhibit the same problems.

      I’ve worked with 2-way radio communications, here, going back about 14 years – mostly Motorola back then – and the problems persist. Unless you still owned a Brick.

  9. TQ White II Friday, July 16, 2010

    I just have to tell you that I hate you all. “piece of junk.” What a bunch of idiots. Everyone I know has an iPhone. Their presentation perfectly corresponds with my experience. I don’t know what is going on but suspect that you all should join a Tea Party so that you can make stupid wisecracks about Obama, too.

    1. “I just have to tell you that I hate you all.”

      Hahahaha, this cracked me up. Honesty in commenting.

      I feel you, brother.

  10. Open Thread: Did Apple Do Enough to Make Antennagate Go Away? Friday, July 16, 2010

    [...] Bets Its Mobile Future on Android, MeeGo See All Articles » Live Blogging: Apple Press Event: It’s all Blown out [...]

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