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We’re not perfect. Phones aren’t perfect. - Steve Jobs
Interesting, they're going to give away a free case. There seemed to be some sentiment that wouldn't happen.
Yes but I think a lot of opinions were formed before the actual facts were known.
Free bumpers.

If you already bought one, you'll get a refund.

If you didn't, they'll mail you one.

If you want to return your undamaged phone for a full refund, you can do that, too.

Brief summary of what they've said so far:

1. Similar things happen to all smartphones. (They had videos showing them happening to many other smartphones.)

2. This isn't making lots of people return their iPhones. (Return rate ~ 1/3 that of 3GS at the same point in its life.)

3. The iPhone 4 does drop more calls than the 3GS, but by less than 1%. (Not clear whether that's 1% of all calls or 1% of calls dropped on the 3GS.)

4. They're going to give everyone a free case and refund everyone who's bought one from them.

5. They've got improvements coming up for the proximity-sensor problems some people have had.

6. That's about it.

It's 1% of all calls: http://www.blogcdn.com/www.engadget.com/media/2010/07/iphone... . Am I the only one that thinks that's actually a lot?
If the norm is a 5% drop rate, that's a 20% increase.

If the norm is even higher, then the increase is less as a percentage, but no wonder ATT won't release the numbers.

If my family and friends' experience is any indication, the drop rate is over 50%. So it's probably going from 55% to 56%: horrible to a teensy bit more horrible.

I live in Los Angeles. There are cell towers uglifying the sky everywhere. My favorites are the mock trees -- one in Burbank is a squat, fake palm tree with "coconut" repeaters. And despite the apparent ability to put towers absolutely anywhere... AT&T still blows.

Your friends and family have one out of every two calls dropped?
It's comical. I call home when I leave work. We might talk for five or ten minutes as I drive. This requires two or three calls, due to the drops -- on a major freeway with five bars of reception.

My family and friends have similar issues. A couple don't have it so bad because they're on the West Side, where AT&T seems to have built more towers -- gotta keep Beverly Hills & the movie studios happy, you know.

Oddly, we have little trouble with 3G data. I can stream podcasts and use Google maps simultaneously. It's the calls that are the issue.

I have a weird theory about that, actually. I have seen some similar issues in the Seattle area when moving from one part of the city to the next; the signal is at full strength, but the call suddenly drops, almost as if I'm crossing a boundary. Now, I preface this by saying I know little to nothing about the cell phone network handles calls, but thinking about this made me wonder if it had anything to do with handing off the connection from one tower to the next. Maybe it's better to have fewer, higher power towers to minimize hand-off than many low powered ones. Of course, that's exactly what most people don't want: high powered cell towers blasting them with radiation.

But I have to wonder if this problem is exaggerated by the 3G connection maintained by the phone. My dad used to have the same problem in NY (not the city), but he switched to edge and stopped dropping the calls. He just turns on 3G when he knows he wants to do some faster web browsing, which is rarely for him. Maybe you could try turning off your 3G and see if it reduces your problem in LA?

I wonder if it could be skewed by everyone testing it out and trying to get calls to drop.
Considering that people constantly complained about call reception and dropping on the 3GS and the iPhone 4 was heralded as the solution?

Yes, I was shocked. I thought Apple handled this all well, but I was really expecting them to say that the "iPhone 4 still provides better reception than the 3GS". I guess they can't actually make that claim and I still find that a bit funny.

Actually, they could still make that claim, and it goes along with my personal theory about the higher drop rate.

The measurement provided was simply the "drop rate" per 100 calls. Implicit in this is that it's the drop rate for successfully connected calls, since a call that never connects can't be dropped. I believe that the iPhone 4 is more sensitive and has better reception than the 3GS. There are rooms in my house where I get 0 bars and I can't make a phone call on the 3GS but I can successfully make calls on the iPhone 4.

So let's say I try to make 100 calls, but the reception sucks in some rooms so on the 3GS only 80 calls successfully connect and of those 4 get dropped. That's a drop percentage of 5% or 5 our of 100. But let's say on the iPhone 4 I'm able to successfully connect on all 100 calls, but since the signal is so low in some of the rooms, I drop 10 of the calls. So 10% or 10 out of 100.

So I've now got a drop rate that's double the 3GS, even though I'm able to make 10 more completely successful calls per 100.

Those pictures of other phones losing signal were hilarious.

Yes, if you hold other smartphones in a clam-like grip then they do lose signal. But not when you place a single finger on one small spot on the outside of the phone.

It's good that Apple will be providing free cases, but it's still going to suck when they start releasing phones with tweaked antenna insulation in a few months that eliminates this issue.

single finger on one small spot

I'd like to see you hold a phone with a single finger...

I hold my phone lightly, not in a death grip. If part of my skin touches the wrong area on the iPhone 4, signal vanishes.

Capeche?

Perhaps then this phone, with it's innovative antenna design, is simply not for you. I'm not sure why Apple owes you a differently designed phone. It is what it is.
Not to be that guy - but it's capisce for your future uses.
I can't believe people still aren't getting this. Their return rate has been ~1%, they've received apple care calls on 0.55% of the phones they've sold.

This is a non-story blown out of proportion by the press who obsessively over-cover Apple products.

(Disclaimer, Apple iPhone owner, 3G and now 4; no problems with either.)

I agree, but, live by the sword, die by the sword.
Yeah, this is what I keep saying. The experience is excellent. A free case? Sweet!
Honestly, how is it going to suck. You can return your current iPhone 4 now and wait for one of those phones with the insulation already present. Seriously, it seems that in your eyes no matter what Apple does it will still suck.
"Maybe we should have a wall of PR people to insulate us, but we don’t."

I bet Katie Cotton and Steve came up with that line together.

Try to search "are not perfect" in Google you will see somethings.
A lot of people ask how Apple didn't pick this up in field testing.

I think the answer is that they wrapped the iPhone 4 in plastic to camouflage it as an iPhone 3GS (as we know from the Gizmodo phone). Hence all their field testing was effectively done with bumpers on.

They knew... Steve Jobs: "The iPhone 4 went through all of these tests. We KNEW that if you held it in a certain way, the bars would go down."
That means they knew something, but not necessarily about the "bridging the gap" problem.
Absolutely. This is a human psychology problem, not an engineering problem. They designed the phone knowing that it suffered more attenuation than other phones, but it also dealt with highly-attenuated signals better than previous iPhones. Overall reception is the same or better, all things considered.

What killed them was the way the reception bars dramatically plunged toward zero within seconds of bridging the antennas. If the iPhone 4 had shipped with the bar distribution formula in 4.0.1 and used the same level of hysteresis as other phones, no one would have noticed the drop and everyone would have happily gone on using their iPhone 4's oblivious to the attenuation.

Good free case, problem solved in my mind. Recall avoided, patch applied, everybody stays happy.

Iphone 4gs, design it and sell it with the case.

In Q&A they seem to be glossing over or ignoring the whole "if you bridge the gap the signal drops" issue (demonstrated here with a paperclip http://www.youtube.com/watch?v=kgouzUMlQpY but as I understand it your finger will do the same thing).

At least when asked somewhat directly, one engineer gave a complete non-answer.

What you see there is a drop of between 6 and 22dB (from four bars to one [+]). Gripping the iPhone will reduce the signal by at most 24dB.

I don’t know whether they don’t acknowledge that. They showed a “X marks the spot” slide. That, to me, seems to be a pretty clear acknowledgement that merely touching that spot weakens the signal.

[+] http://www.anandtech.com/show/3821/iphone-4-redux-analyzing-...

In reference to the "x marks the spot" they claimed that it "showed you where to cover the antenna", trying to draw a parallel with covering the internal antenna on any other phone.

That is ridiculous. You aren't "covering the antenna" when you cover that spot. The antenna is the big strip of metal above that spot. Instead you're upsetting the profile of the antenna, which is entirely different.

The presentation was incredibly deceptive and flawed.

One of the things that most bothered me in the initial responses from Apple (the Jobs emails and the open letter) is that none of them acknowledge that there is a fundamental difference between antennas from other smartphones losing signal and the iPhone 4, where the antenna is exposed and can be shorted, even with one finger. I'm kind of disappointed they apparently still don't acknowledge that (maybe the live transcript is incomplete).

Citing dropped call numbers or return rates or showing other smartphones with signal reduction caused by something completely different just seems like willful misinformation. I suppose their usual MO is to not acknowledge complaints head-on, but that's usually with new features people would like to see. If I can short an antenna and change its RF characteristics so as to lead to an instant dropped call, that seems like a fundamental engineering flaw, and I would've liked them to acknowledge that.

> caused by something completely different

Um, from what I saw it was caused by the same thing. You hold a phone a certain way you lose signal strength.

> that seems like a fundamental engineering flaw, and I would've liked them to acknowledge that.

I watched the whole thing and several times it was acknowledged as such. Maybe you wanted them to say it was only an iPhone4 issue and not a general smartphone problem?

>Um, from what I saw it was caused by the same thing. You hold a phone a certain way you lose signal strength.

Apple is playing some extraordinary deception with that. They're comparing a death grip on phones (which is entirely unnatural and I certainly don't hold a phone like that), and saying "See, it's all the same".

That isn't the issue. The issue is ruining the profile of the exposed 3G antenna by electrically distorting it (whether with your body or against the GPS antenna).

It was pretty clear when he talked about the 3GS and cases -- a death grip with or without a case will yield exactly the same outcome. But they're trying to conflate the downsides of an external, unavoidable antenna with holding the phone in a ridiculous fashion.

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With those support call numbers about the issue and the return rates for the phone, it doesn't seem to be unavoidable to most people.
Hey, neat. An Apple comment by ergo98 that I agree with.
I have only read the gdgt transcript, so if you watched it somehow I'm going to defer to you about anything not in the transcript.

But as far as the 'completely different' thing goes, as far as I know the lower signal can be caused by signal being absorbed by your hand. But what seems to happen with the iPhone 4 is that there is also this shorting issue because of an exposed antenna. But when directly asked about the shorting issue they say it's about your body being a "pretty effective signal absorber".

Ok, yes I agree with that. They gave a rather bad answer to that question. I am surprised that a follow-up question was not asked to bring it back around to the shorting issue.
Based on the little I know about signal strength for digital phones, the number of bars really doesn't matter, The bars could just be replaced with an indicator letting you know whether or not you have strong enough signal to make a call. And from that perspective, the stats discussed today that there is less than one additional dropped call per 100 calls make this whole thing seem like a non-issue.

However, what I haven't heard discussed and would like to hear about from someone who knows what their talking about is whether or not signal strength affects data transfer rates. I use data a lot more than voice on my phone and if it's significantly easier to reduce the signal quality on the iPhone 4, I don't think I would get one.

Without getting into details about digital modulations, yes, parameters such as signal strength, network congestion, user speeds, etc. do affect transfer rates.

The speeds quoted by phone providers are always the maximum transfer rates allowed by the communication standard used by the network.

To give an example with WiFi networks. Even though a router might support 802.11n and have a maximum speed of 144Mbit/s, if you're far from it, your transfer speed could only be 11Mbit/sec.

I've run some 3G speed tests on my iPhone 4, and even when I death-grip it and the bars drop, the most dramatic result I've gotten is increased ping (10x as much ping). Throughput doesn't seem to suffer.
Q: Are you willing to make an apology to investors? Steve: You know we hear from customers who love this phone and have a great experience with it, and we're doing a lot to help them with any issues they're seeing. To investors, you know, you invest in the company we are, so if the stock goes down $5... I don't think I owe them an apology.

Whether or not Jobs is bs-ing about loving his customers so much, I wish more CEOs took this attitude. I think that doing your best to make your customers happy reaps far more benefits in the long haul than doing your best to make investors happy. In Apple's case at least, the fact that they ignored what their investors demanded of them during their dark days actually made the investors a lot more money.

I think this is the correct attitude when you're an entertainment company, or a company that does have a direct relationship with costumers, but might not work for other types, such as services for enterprises.
Is it? When you are selling services for enterprises, shouldn't your focus still be on making those businesses happy? I've never been in such a market, so maybe I don't know, but it seems to me like your focus should be similar.
Yes it is, but there the focus on the customer is far less important than on the investors. This is part of something that makes Apple and some other companies unique.
I run a B2B company and I think customer focus is effective there as well. I'm in a small niche but with enough competitors to see other approaches. I've seen competitors with what looked like great marketing, great sales efforts, and important looking partnerships.

We don't do any of that. We just try to do our best with each customer and grow from word of mouth. For awhile I thought we were going to get creamed by all these other companies that seemed to have the sales/marketing activities nailed. But in the end we seem to be growing much faster and most of the efforts from other companies to ram their product down people's throats weren't just less effective, they completely failed.

I think in B2B, customer focus leads to repeat business, expanded scope of business with existing customers, and word of mouth. Normally once you have a sale your margins are really good. Keeping customers happy is where your profits are.

I'm glad Gdgt ran this full quote. Engadget unfortunately dropped the first part of it from their liveblog (not really a problem, they're typing and submitting pretty quickly) but then ran an article that started "Apple's not really ready to say it's sorry about the iPhone 4 antenna design..."
The key difference here is a CEO that is interested in building long-term value and great products that customers love, rather than a CEO who is only incentivized to create short-term shareholder value.
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This is a good quote, from the Q&A session:

You could make a really big smartphone that doesn’t have this problem — some of these guys are making Hummers now — so big you can’t get your hand around it. But no one’s going to buy that.

Something no one is mentioning or commenting on: When the 3GS launched the majority of buyers walked out of the store with a case in hand. When the iPhone 4 launched 80% of buyers were not able to take a case with them as well (due to their being no third party cases at launch and a shortage of bumpers). If it would have been the opposite, and 80% of customers walked out of the store WITH a case, I'm guessing that "less the 1%" stat about the iPhone 4 vs 3GS would actually flip to the iPhone 4 as having the better ratio of dropped calls.

I'm willing to bet you'll see @Gruber focus on this point heavily, which is a good thing, because it's a great point by Jobs.

Does 3GS reception improve with a case? I thought the iPhone 4 only improved because of the exposed antenna.
According to Steve (and others) you get a similar phenomenon with earlier iPhones, it's just that the "do not touch" zone is in a different place. So a case would help any of these phones.
The case helps the iPhone 4 because it prevents conductive contact between your skin and the antenna, right? Previous iPhones had no exposed antenna, yes? Or did they? If not, the case would not have made as big a difference.
Just to get some clarity on how people who have the device actually feel about all of this (And that it's not just the media), how many of you are going to return the iPhone 4?