• by Mark Walsh  @markfwal, July 19, 2010

Apple will give iPhone 4 customers a free protective case, or "bumper," to remedy its much-publicized reception problems when the device is gripped a certain way.

During a press conference July 16, aimed at quelling the controversy over the issue, Apple CEO Steve Jobs also said anyone who buys the iPhone 4 by September 30 will be eligible for a free bumper. And customers who are still unsatisfied can get a full refund within 30 days of purchase without being charged a restocking fee.

Those steps come in addition to a software update that Apple previously announced to fix a separate problem that causes the iPhone 4 and earlier models to overstate the signal strength displayed.

Speculation had arisen that Apple might issue a full-blown recall of the device to deal with mounting criticism over the antenna reception problem that emerged shortly after the company released the latest version of its signature device in early June. Jobs said more than 3 million iPhone 4s have been sold to date, indicating that the uproar has not hurt sales significantly.

The combative Apple CEO conceded that the iPhone 4 loses signal strength when gripped by the lower left corner, but argued that similar issues have affected other types of smartphones and that Apple has been swift in its response to complaints. "We're not perfect -- we know that you know that, and phones aren't perfect," acknowledged Jobs, who nonetheless failed to offer the full apology some had expected.

Apple initially suggested that users hold the phone differently or buy a bumper for $29 to avoid weak reception on the iPhone 4, which for the first time incorporated the antenna into a stainless steel band wrapping its all-glass frame. Then a week later, the company said it was "stunned" to learn that the problem lay in a software glitch that mistakenly inflated signal strength by up to two bars.

A software update promised by Apple for the signal display problem, however, failed to quiet the controversy, especially after Consumer Reports disputed Apple's explanation and said its own tests showed the reception issue resulted from a hardware problem. (A later test by Consumer Reports indicated the bumper solved the problem.)

On Friday, Jobs suggested the entire matter was overblown by the media because just over a half a percent of those calls to Apple customer support are from people with complaints over the iPhone 4's antenna. He also noted that the 1.7% return rate of the iPhone 4 to date is less than a third that of the iPhone 3GS during the same period after launch last year.

He admitted that the iPhone 4 has been dropping calls at a higher rate than the 3GS, but said the rate was still less than one per 100 calls. Jobs said he had a theory that was because more buyers of the iPhone 4's predecessor device bought a bumper case, but further testing will be done.

In addition to giving away free bumpers, he said anyone who has already bought one can get a refund. Jobs added that Apple "can't make bumpers fast enough" and will partner with third-party sources to ramp up production. "We care about every user and we are not going to stop until every user is happy," he assured.

Apple has already been hit with lawsuits over the signal loss issue in the iPhone 4 that allege the company knowingly sold the phone with a faulty antenna. Asked about reports in The Wall Street Journal and Bloomberg that Apple was aware of the problem earlier, Jobs called them "a total crock."

The issue has also reached the halls of power in Washington, where consumer watchdog Sen. Charles Schumer (D., N.Y.) wrote an open letter earlier this week to Jobs calling on him to come up with a permanent fix to the iPhone 4's "death grip" reception problem.

Despite the brouhaha, Apple is pushing ahead with its international rollout of the iPhone 4 and will launch the handset in 17 more countries on July 17th -- the same countries it promised before with the exception of South Korea.