June 25 (Bloomberg) -- Apple Inc. responded to complaints about reception on its new iPhone 4 by telling customers they should hold the device differently.
“Gripping any mobile phone will result in some attenuation of its antenna performance, with certain places being worse than others depending on the placement of the antennas,” Apple said today in an e-mailed statement. “If you ever experience this on your iPhone 4, avoid gripping it in the lower left corner in a way that covers both sides of the black strip in the metal band, or simply use one of many available cases.”
Yesterday’s introduction of the iPhone 4 was marred by criticism that signal strength diminishes when users cover the bottom-left corners with their palms. The iPhone has become Apple’s top-selling product since its 2007 debut, accounting for 40 percent of sales last quarter.
Chief Executive Officer Steve Jobs added a high-definition video camera, multitasking and video calling to the iPhone 4 to fend off competition from phones running Google Inc.’s Android operating system. It also has a stainless-steel band that’s designed to improve network reception.
Customers have posted videos on the Internet demonstrating trouble with the iPhone 4’s new antenna.
According to an e-mail exchange posted on the MacRumors.com website, Jobs called the matter a “non issue.” Users expressed disappointment with the response.
“I’m an Apple person going back a long time and have spent a small fortune on Apple stuff over the last few years,” said Patrick Coleman, 58, a senior systems administrator from Rockville, Maryland, who purchased two iPhone 4s. “It’s really awful when Jobs has this kind of attitude.”
Shaw Wu, an analyst at Kaufman Bros. LP in San Francisco, doesn’t expect the antenna problem to lead to a product recall.
“Most users have a case anyway to protect their iPhone,” he said in a report. He recommends buying Apple stock. “In the worst case, Apple provides a discount on the $29 iPhone 4 bumper case or includes one for free with an iPhone 4 purchase. Either way, we do not think this would have a material impact on our forecasts.”
David Carey, vice president of technical intelligence at UBM TechInsights, an Austin, Texas-based company that studies the engineering of electronic devices, said it’s not clear whether the antenna problem can be fixed with a software update or if it’s more structural.
“There is a point where software can’t dig you out of a hole,” he said. Still, given the phone’s rigorous testing process, “it would strike me as surprising that they would have a permanent problem on their hands,” Carey said.
The antenna matter didn’t stop analysts from increasing their projections. Yair Reiner, an analyst at Oppenheimer & Co. in New York, estimated Apple sold 1.5 million iPhone 4s yesterday and said the company’s stock may reach $345 a share.
“Apple continues to capture the attention and catalyze the passions of the American consumer in an unprecedented way,” Reiner said.
Reviews of the device have been positive, with Bloomberg Businessweek’s Rich Jaroslovsky saying Apple has “brilliantly” created a “unified user experience” with its video calling, multitasking and high-definition video features.
Apple fell $2.30 to $266.70 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have gained 27 percent this year.
The company said this week it’s delaying the release of white iPhone 4 models until the second half of July because of unexpected manufacturing challenges. Jobs unveiled the phone on June 7.
Apple, based in Cupertino, California, is facing increased competition from Android phone makers, such as HTC Corp., which rely on Google’s operating system. There are some 60 Android-based mobile phones.
In the U.S., a 16-gigabyte model of the iPhone 4 costs $199, and a 32-gigabyte model is priced at $299. AT&T Inc., the exclusive U.S. carrier for the iPhone, said this month it will end unlimited data plans, an effort to manage the surge in demand caused by devices like the iPhone. The carrier has been criticized for dropped calls.
Apple may sell more than 10 million iPhones in the quarter ending in September, said Colin Gillis, an analyst at BGC Partners in New York.