Apple iPhone 4 fix: a free 'bumper'

Apple is offering a free rubber "bumper" to owners of the iPhone 4 to head off criticism over problems with its signal reception but dismissed suggestions that the device should be recalled.

Steve Jobs, Apple's chief executive, said the problems had affected only "a small batch" of phones, and that it was due to an "inherent problem" with smartphones. "We're not perfect," he said at a press conference at Apple's HQ in Cupertino, California. "We haven't figured out a way around the laws of physics yet."

Nevertheless Apple will offer the "bumpers", which cover the sides of the phone, around the exposed metal antenna which receives the mobile signal. When users have held the phones by the bottom and left sides it has led to a loss of signal. People who have already bought a case are entitled to a free cash refund.

Jobs headed off the suggestion that Apple would have to recall the phone, following a media storm which had seen some compare the problems to those faced by Toyota, whose cars suffered problems with the accelerators and brakes. However the iPhone has not met any of the usual criteria for a product recall, such as spontaneously combusting or causing harm through heat or emission.

Jobs revealed that Apple has sold 3m of the iPhone 4 since its launch on 24 June. That indicates that the rate of sales has slowed dramatically, after 1.7m were sold in the first three days. But he insisted customer satisfaction was higher than with previous versions: the return rate was just 1.7%, he said, compared to 6% for the previous model, the iPhone 3GS released last summer.

The company said it cannot make enough bumpers to satisfy demand, but will keep the offer of the free case open until September.

Jobs admitted that there had been complaints about the phone losing signal when held by the left and bottom sides – but said that they were natural for any phone. He acknowledged they were not perfect but insisted that every phone manufacturer had problems with antenna design and interaction with the body's tendency to absorb the phone signal. Apple's stock rebounded as Jobs began speaking at 6pm UK time last night.

Apple's share price fell by 4% overnight on Tuesday, knocking $9.9bn (£6.5bn) off the company's $230bn value, as speculation grew that the phone might have to be recalled.

Since the iPhone 4's launch, there have been many complaints about the way that the signal appears to drop off dramatically when it is held with a hand wrapped around its left and bottom sides (a problem dubbed the "iPhone Death Grip").

Apple this week said that it had made a "simple and surprising" error in the software that displayed the strength of the signal, and on Thursday night issued a software update which changes how many bars are displayed when the signal becomes weaker.

The iPhone problems now feature in dozens of jokes. Earlier this week Kevin Turner, the chief operating officer of Microsoft, spoke at a conference about its Windows Phone 7 software.

"One of the things that I want to make sure that you know today," he said, "is that you're going to be able to use the Windows Phone 7 and not have to worry about how you're holding it to make a call."