Defiant Jobs stands by iPhone 4

By : |July 19, 2010 0

CUPERTINO, USA: A defiant Steve Jobs on Friday rejected any suggestion the iPhone 4’s design was flawed, but offered consumers free phone cases to address reception complaints that have hurt Apple Inc’s image and shares.

At a rare, 90-minute press conference, the Apple chief executive asserted that reception issues were a problem shared by the entire smartphone industry, naming specifically rivals Research in Motion, Samsung Electronics and HTC Corp.

Jobs maintained there were no problems with the iPhone 4’s wraparound antenna design and accused the media of trying to "tear down" a company that had grown so successful.

                                 

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After the June 24 launch of the iPhone 4, some users reported drastically reduced signal strength when they held the touch-screen phone a certain way, in what has come to be known as the "iPhone 4 death grip."

Apple has lost more than $16 billion of its market value since June 28, with at least some of that attributed by analysts to the iPhone snafu.

Apple set the tone of Friday’s event early, leading off with a YouTube video poking fun at the so-called "Antennagate" controversy (http://www.youtube.com/watch?v=VKIcaejkpD4).

"This has been blown so out of proportion, it’s incredible," Jobs, 55, told reporters and analysts in an auditorium at Apple’s Silicon Valley headquarters.

"This is life in the smartphone world. Phones aren’t perfect. Most every smartphone we tested behaved like this."

Analysts say sales of the iPhone 4 have not been impacted by the antenna flap, though some warn about longer-term damage to a reputation for quality products honed on the iPod.

Most on Wall Street have not altered their iPhone sales estimates for the current quarter, which range from 10 million to 12 million units.

Communications experts say the flap has always been less about a presumed flaw in the iPhone than the secretive Apple’s slow and uneven response to it.

The cost of Apple’s remedy should be insignificant. One analyst estimated simple cases would cost the company as much as $45 million, while an in-store repair program would have run as much as $300 million.

Shares of Apple climbed as much as 1.4 per cent after Jobs offered the free case to users, but closed 0.62 per cent lower at $249.90 in an overall market sell-off. Some analysts said they had expected more from Apple to address the issue, and thought that Jobs should have taken full responsibility.

"Apple is held to a much higher standard. You don’t want to compare yourself to the competition," said Ashok Kumar, an analyst with Rodman & Renshaw.

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