Apple Inc. CEO Steve Jobs announced the giveaway Friday at the company's headquarters in Cupertino, Calif. Those who have already bought the phone and new buyers will all be eligible. They will also be able to get a refund.
Phones usually have an antenna inside the body. In designing the iPhone 4, Apple took a gamble on a new design, using parts of the phone's outer casing as the antenna. That saved space inside the tightly packed body of the phone, but means that covering a spot on the lower left edge of the case blocks wireless signal.
Consumer Reports magazine said covering the spot with a case or even a piece of duct tape alleviates the problem. It refused to give the iPhone 4 its "recommended" stamp of approval for this reason, and it had called on Apple on Monday to compensate buyers.
Jobs said the company doesn't have its head in the sand. He said its engineers are focusing on pinpointing the real problem so that they can then form an appropriate solution.
Jobs provided evidence that shows other cell phones, like the BlackBerry Bold 9700 also show a signal drop when cupped a certain way: from 5 bars to 1.
Jobs maintained that smart phones are not perfect, overall.
He said calls to Apple's AppleCare customer support that are routinely logged show just over a half a percent of those calls are from customers with complaints over the iPhone 4's antenna. Those numbers don't add up to all the mounting concerns waged by the media, Jobs said.
Apple believes the iPhone 4 has a superior antenna, but Jobs admitted the handset is dropping more calls per each 100 calls than the iPhone 3GS.
"We're not feeling right now that we have a giant problem we need to fix," Jobs said. "This has been blown so out of proportion that it's incredible. I know it's fun to have a story, but it's less fun when you're on the other end of it."
Jobs claimed he has received thousands of emails from users who claim they have no problem with the iPhone 4, but Apple wants all of its customers to be happy, so it's continuing to invest in researching the matter.
Jobs apologized to buyers who had less than perfect experiences with the new device.
"We're going to do whatever it takes to make them happy and if we can't make them happy we're going to give them a full refund and say we're really sorry we inconvenienced you, and we're going to do better next time," the CEO said.
iPhone 4 owners can register for the free protective cases on Apple.com starting next week. Anyone who is not satisfied after receiving the case can return their undamaged iPhone within 30 days for a full refund with the restocking fee waived, Jobs said. He says refunds are available, even for those with long-term AT&T contracts.
Consumer Reports issued a statement after the news conference, saying consumers deserve answers and fairness.
"Providing free bumpers and cases is a good first step toward Apple identifying and finding a solution for the signal-loss problem of the iPhone 4," the statement said.
To read more about the Consumer Reports iPhone 4 test, please visit consumereports.org.