In Motorola’s (MOT) words, the 18 patents in question concern “key technology areas found on many of Apple’s core products and associated services, including MobileMe and the App Store. The Motorola patents include wireless communication technologies, such as WCDMA (3G), GPRS, 802.11 and antenna design, and key smartphone technologies including wireless email, proximity sensing, software application management, location-based services and multi-device synchronization.”

They don’t seem to be upset about Ping, though.

We’ve asked Apple (AAPL) for a response. Here’s Motorola’s release:

LIBERTYVILLE, Ill., Oct. 6 /PRNewswire-FirstCall/ — Motorola, Inc. (NYSE: MOT) today announced that it’s subsidiary, Motorola Mobility, Inc., has filed a complaint with the U.S. International Trade Commission (ITC) alleging that Apple’s iPhone, iPad, iTouch and certain Mac computers infringe Motorola patents. Motorola Mobility also filed patent infringement complaints against Apple (Nasdaq: AAPL) in the Northern District of Illinois and the Southern District of Florida.

Overall, Motorola Mobility’s three complaints include 18 patents, which relate to early-stage innovations developed by Motorola in key technology areas found on many of Apple’s core products and associated services, including MobileMe and the App Store. The Motorola patents include wireless communication technologies, such as WCDMA (3G), GPRS, 802.11 and antenna design, and key smartphone technologies including wireless email, proximity sensing, software application management, location-based services and multi-device synchronization.

Motorola Mobility has requested that the ITC commence an investigation into Apple’s use of Motorola’s patents and, among other things, issue an Exclusion Order barring Apple’s importation of infringing products, prohibiting further sales of infringing products that have already been imported, and halting the marketing, advertising, demonstration and warehousing of inventory for distribution and use of such imported products in the United States. In the District Court actions, Motorola Mobility has requested that Apple cease using Motorola’s patented technology and provide compensation for Apple’s past infringement.

Kirk Dailey, corporate vice president of intellectual property at Motorola Mobility, said, “Motorola has innovated and patented throughout every cycle of the telecommunications industry evolution, from Motorola’s invention of the cell phone to its development of premier smartphone products. We have extensively licensed our industry-leading intellectual property portfolio, consisting of tens of thousands of patents in the U.S. and worldwide. After Apple’s late entry into the telecommunications market, we engaged in lengthy negotiations, but Apple has refused to take a license. We had no choice but to file these complaints to halt Apple’s continued infringement. Motorola will continue to take all necessary steps to protect its R&D and intellectual property, which are critical to the company’s business.”

Just when Apple (AAPL) thought it had closed antennagate, Consumer Reports has thrown it wide open.

The company’s discontinuation of its iPhone 4 case program has prompted the publication to once again deny the device its endorsement. Because, why not, right?

“Our tests found the Bumper successfully mitigates the iPhone 4′s reception issue, which was a weak point in the phone’s otherwise-stellar performance in our tests,” Consumer Reports said in a post to its blog today. “And we agree with Apple that not all iPhone 4 owners will experience reception difficulties with the device. But putting the onus on any owners of a product to obtain a remedy to a design flaw is not acceptable to us. We therefore continue not to recommend the iPhone 4, and to call on Apple to provide a permanent fix for the phone’s reception issues.”

And, judging from iPhone 4 sales to date, consumers will likely continue to pay little attention to CR’s continued non-recommendation. After all, the publication did rate the iPhone 4 “Excellent” in its display, navigation, Web browsing, multimedia and battery life categories, “Very Good” in phoning and messaging and “Good” in voice quality.

[Note: Obviously Photoshopped image obviously Photoshopped]

PREVIOUSLY

• iPhone 4 Full Coverage on AllThingsD.com
• Apple Ends iPhone 4 Case Program, Says Attenuation Issue Is “Even Smaller Than We Originally Thought”
• Apple Hopes for Best Case Scenario in iPhone Flap
• Apple’s “Just Encase” Answer to iPhone 4 Complaints [Live Blog]
• What Will Apple Say Tomorrow? Your Guess Is as Good as My Analyst’s.
• Apple Releases iOS 4.0.1 for iPhone, iOS 3.2.1 for iPad
• The Reality Distortion Field Appears to Be Suffering Attenuation Issues as Well
• Analyst: “Highly Unlikely” iPhone 4 Recall Could Cost Apple $1.5 Billion
• Apple Snips Needling Threads From iPhone 4 Forums
• IPhone 4 Recall? Get a Grip!
• Consumer Reports: By the Way, the iPhone 4 is Also the Best Smartphone on the Market
• Duct-Tape Makers Look for Boost From Consumer Reports iPhone Verdict
• Consumer Reports: We Can’t Recommend the iPhone 4
• Apple: Your iPhone 4 Antenna Is Fine, and So Is Your Reception–But We’re Fixing Our Software Anyway
• Grip Different: Apple, AT&T Sued Over iPhone 4 Antenna Issue
• Gripping Antenna Drama Won’t Hold iPhone 4 Back, Says Analyst
• Apple on iPhone 4 Reception Problems: Grip Different

“We now know that the iPhone 4 antenna attenuation issue is even smaller than we originally thought,” Apple (AAPL) said in an update to its iPhone 4 Case Program site. “A small percentage of iPhone 4 users need a case, and we want to continue providing them a Bumper case for free. For everyone else, we are discontinuing the free case program on all iPhone 4s sold after September 30, 2010. We are also returning to our normal returns policy for all iPhone 4s sold after September 30. Users experiencing antenna issues should call AppleCare to request a free Bumper case.”

PREVIOUSLY

• iPhone 4 Full Coverage on AllThingsD.com
• Apple Hopes for Best Case Scenario in iPhone Flap
• Apple’s “Just Encase” Answer to iPhone 4 Complaints [Live Blog]
• What Will Apple Say Tomorrow? Your Guess Is as Good as My Analyst’s.
• Apple Releases iOS 4.0.1 for iPhone, iOS 3.2.1 for iPad
• The Reality Distortion Field Appears to Be Suffering Attenuation Issues as Well
• Analyst: “Highly Unlikely” iPhone 4 Recall Could Cost Apple $1.5 Billion
• Apple Snips Needling Threads From iPhone 4 Forums
• IPhone 4 Recall? Get a Grip!
• Consumer Reports: By the Way, the iPhone 4 is Also the Best Smartphone on the Market
• Duct-Tape Makers Look for Boost From Consumer Reports iPhone Verdict
• Consumer Reports: We Can’t Recommend the iPhone 4
• Apple: Your iPhone 4 Antenna Is Fine, and So Is Your Reception–But We’re Fixing Our Software Anyway
• Grip Different: Apple, AT&T Sued Over iPhone 4 Antenna Issue
• Gripping Antenna Drama Won’t Hold iPhone 4 Back, Says Analyst
• Apple on iPhone 4 Reception Problems: Grip Different

Apple (AAPL) now has an almost 14 percent share of the smartphone market and an almost three percent share of the overall handset market. The company shipped 8.4 million iPhones during the quarter–a nice increase from the 5.2 million it shipped a year earlier, but down from the 8.8 million of the prior quarter. And to Strategy Analytics, that suggests the iPhone juggernaut may be slowing, if only a bit. “The honeymoon period for Apple in the mobile world is clearly coming to an end,” Strategy Analytics analyst Neil Mawston wrote. “Apple was criticized for its intensive production methods in China, while the iPhone has been heavily criticized for its poorly designed touchable antenna, and may have lost some heartshare in recent weeks because of its perceived mishandling of the antenna problem.”

Because of that, said Mawston, the iPhone is now “more vulnerable to competitive attacks from rivals like Nokia, Android, BlackBerry and Motorola.” More vulnerable, sure. But only to the well-armed attacker, and I’m not sure you could say that about everyone on Mawston’s list. Not yet, anyway.

And seriously, Nokia?

BoomTown took the corporate All Things Digital jet–aka Virgin America, seat 10A–up to Redmond, Wash., today to attend Microsoft’s annual Financial Analyst Meeting, which also includes a passel of media drones like me.

I will be liveblogging the event all day, which is essentially a cavalcade of top execs from the software giant taking the stage and showing off their wares.

There should be a little bit of swanning, since Microsoft (MSFT) turned in very good financial results last week, posting a huge increase in earnings and revenue due to the uptick in PC sales and the intro of the Windows 7 operating system. Losses at its Online Services division remained high, so thank goodness for servers and tools!

Here we go:

8:15 am PT: I was late due to the completely confusing streets of suburban Redmond, all of which look exactly alike, as does every building on Microsoft’s sprawling campus. I am a streets of San Francisco girl, obvi.

In the Conference Center, though, things had not started well past the 8 am start time, as we await the entry of investor dude Bill Koefoed.

U2′s “Beautiful Day” was playing over the sound system, which it was not up here in the Pacific Northwest this morning–it was kind of cold and gloomy, a la “Twilight”–but hopefully will be for sparkly Microsoft execs. We’ll see!

Finally, Koefoed came out and started in on feedback, touting the newly renovated investor relations site, which he is “pretty proud of.” It is nice looking, as are most of Microsoft’s hand-out materials.

In fact, he sent me an excited note last week, because I posted Microsoft’s pretty fourth-quarter slides.

Dear Bill: You need much better things to get excited about! Like the new Magic Trackpad from Apple (AAPL)! Wait, I mean Windows Phone 7!

Koefoed moved quickly to point out last week’s strong results, which is no surprise. When you’ve got lemonade, make more lemonade!

Then he outlined the various Microsoft’s eight “core” businesses, such as Xbox, Bing, Microsoft Office, Windows Azure and, of course, Windows, that the company will be going over.

That’s a lot of core, isn’t it?

Some questions to be answered: Business PC refresh and share momentum? Impact of iPad/slates? Windows 7 phone? Expense control?

Beautiful or not, it was going to be a looooong day.

8:42 am: A jaunty Kevin Turner, Microsoft’s COO, bounded out. He tried to get the crowd more lively, but this was not to be unless there was a lot more coffee.

I had great hopes for a goofy quote this morning from Turner, who declared at the Microsoft Worldwide Partner Conference earlier this month about Apple’s antenna controversy: “It looks like the iPhone 4 might be their Vista, and I’m okay with that.”

I don’t know about you, but insulting a competitor by shooting off your own foot is a gift that keeps on giving to me.

In any case, Turner said Microsoft was now “leading with the cloud,” a move that the company had been resisting in the past. Now: All in!

He outlined all the various services for business customers. “We are the market leader in cloud services for business,” said Turner, noting Microsoft had been too quiet about the inevitable move of data and software services to big services in the digital sky.

(Actually, in its secret heart, Microsoft was hoping this whole Internet thing would go away and it would be back to a PC on every desktop, but that horse has left the barn, so it’s cloud time!)

Next up for Turner: The much deserved popularity of Windows 7. Of course, since Vista was Microsoft’s Antennagate–except much, much, much worse–it was not hard to be better.

Turner then moved on to bashing Google (GOOG) and other competitors. Turner put up some quotes from Jaguar employees, after the car company switched to Google for email and other services.

One said Google was like vinyl seats. Ziiiiing!

Next Turner victim: VMware (VMW)! He claimed its products were pricier and not cloudy enough.

As for Linux: Meh!

Oracle (ORCL): Customers don’t want to be locked into the land of Larry Ellison!

Cisco (CSCO): Just you wait, John Chambers!

9:19 am: Turner headed off and Chief Research and Strategy Officer Craig Mundie started in on his speech, titled “Reimagining Microsoft’s Future.”

That would be the client plus the cloud, natural user interface and something he called “working on your behalf.”

Mundie launched into his future-dude schtick, but he’s not exactly Alvin Toffler, so I started desperately mainlining the caffeine.

He talked about movable data centers, the “Internet of Things” and other cloud innovations, but there is no new idea here to blow your mind.

Is it too much to wish Mundie would talk about an invisibility cloak? Instead, it was the orchestration of data authority.

That will apparently be a new data marketplace product, codenamed Dallas, to shop for giant data sets and more.

Mundie than showed off some personalization-driven features in the Bing search service, which are also not new concepts.

For example, he showed a menu, embedded in a table, that might know what you like to eat at a particular restaurant you frequent.

This is what would be on my table and there is no need of a fancy computer table to know this: Donuts, donuts, donuts.

Speaking of which, FAM minions: Where the heck were my donuts?

Mundie then moved onto Kinect, once called Project Natal, the actually cool gesture interface for gaming that will be available for Xbox soon.

Finally, he finished up with a video clip of a medical triage assistant. Great, even less customer service from hospitals. The demo was flatly freaky.

The morning session wrapped up with a visit to the technology showcase to “expect the unexpected,” although I was not expecting that in any way, and then it was off to lunch.

Next up in the afternoon session: CEO Steve Ballmer at 1 pm PT.

Reports of the problems have been overshadowed by “Antennagate” — complaints about the iPhone 4 antenna that led Apple to issue free cases to all buyers. But since the iOS 4 software became available in late June, user concerns have surfaced on Apple forums.

The most common criticism is that the phone is slow after an upgrade. There are also many complaints that the phone drains the battery quickly and becomes excessively hot. Concern about general problems such as slowness and battery life on gadgets isn’t unusual, but using iOS 4 on the iPhone 3G seems to make the problems so bad that the phone is nearly unusable for some people.

Read the rest of this post on the original site

Here’s a song from the Song-a-Day guy on YouTube–also known as Jonathan Mann–on how he writes a song a day.

Mann, as you recall, just had his song about the Apple (AAPL) iPhone 4 antenna issue played at the press conference about the controversy.

He also penned the catchy but annoying Bing jingle winner, “Bing Goes the Internet,” in late 2009 about the Microsoft (MSFT) search service.

Today, it’s a ditty about how he does these ditties, which are often tech-oriented. In fact, below that one, is another he did recently on Apple CEO Steve Jobs, using video from the recent interview Walt Mossberg and I did with him at the D: All Things Digital conference.

Enjoy:

#570

#541

Though Nokia (NOK) was not among the companies whose products were included in Apple’s (AAPL) demonstration of other smartphones susceptible to signal attenuation, Cupertino has graciously opened up a spot for it on its new Smartphone Antenna Performance page.

On Wednesday, the Nokia N97 suddenly appeared between Samsung’s Omnia II and HTC’s Droid Eris along with photos and video showing the device dropping to two bars from seven when held in a way that attenuates its signal reception.

A deft little jab back at Nokia from Apple and one that ably belies claims like these:

Nokia has invested thousands of man hours in studying human behavior, including how people hold their phones for calls, music playing, web browsing and so on. As you would expect from a company focused on connecting people, we prioritize antenna performance over physical design if they are ever in conflict.”

As I said a few days ago, “For the past few weeks [this "death grip"] issue has been a storyline for Apple alone; now it’s everyone else’s as well.” Including Nokia.

Nor did he really need one. Because Apple has once again obliterated investor expectations. Posting third-quarter results after the bell Tuesday, the company reported earnings per share of $3.51 on revenues of $15.7 billion–a record 78 percent increase over the same period a year ago. The Street had been looking for EPS of $3.11 on revenues of $14.75 billion. Gross margin was 39.1 percent, compared to 40.9 percent in the year-ago quarter. And 52 percent of the quarter’s revenue came from international sales.

Apple (AAPL) sold 3.47 million Macs during the quarter (no cannibalization by the iPad here), a 33 percent unit increase over the year-ago quarter and a new quarterly record. It sold 8.4 million iPhones–61 percent more than it did a year ago. And it sold 3.27 million iPads in the device’s first quarter at market.

The only product to see a sales decline was the iPod. Apple sold 9.41 million of them during the quarter, eight percent fewer than it did last year.

“It was a phenomenal quarter that exceeded our expectations all around, including the most successful product launch in Apple’s history with iPhone 4,” Jobs said in a statement. “IPad is off to a terrific start, more people are buying Macs than ever before, and we have amazing new products still to come this year.”

We have amazing new products still to come this year.

This year’s already seen the introduction of the iPad and the iPhone 4. What could he possible be referring to? That all-in-one connected Apple Television we keep hearing about?

Apple’s shares are spiking on the company’s latest financials. They’re up nearly four percent in after-hours trading as I write this. You can almost see concerns over antennagate sublimating before your very eyes.

NOTES FROM THE EARNINGS CALL

• Apple CFO Peter Oppenheimer and COO Tim Cook will be presiding over today’s call.
• Oppenheimer notes that the “tremendous growth” the company saw during the quarter was driven by the launch of the iPad in addition to strong iPhone and Mac sales.
• Apple sold 3.47 million Macs during the quarter–a record. That’s 33 percent year-over-year growth, far better than that of the overall market’s 22 percent. Record Mac sales in the education market despite budget cutbacks.
• ITunes revenue was $1 billion. More than 225,000 apps in App Store, including more than 11,000 for the iPad. Over five billion apps downloaded to date.
• According to IDC, the smartphone market grew 38 percent during the June quarter. The market for the iPhone grew almost twice as fast, says Oppenheimer.
• Cumulative sales of “iOS devices”: More than 100 million
• IPod sales are down, but this was expected as people move to the iPhone. The iPod’s share of the U.S. market for MP3 players is still 70 percent.
• IPod touch sales are up 48 percent year-over-year.
• Apple’s retail stores generated about $2.58 billion in revenue, up 73 percent year-over-year. About 677,000 Macs sold, a nice jump from the 492,000 sold a year ago. Fifty percent of Macs sold were to customers who had never owned one before. Apple plans to open 24 stores this quarter, among them outlets in Paris, Shanghai, London, Barcelona and Madrid.
• Apple is deferring revenue for the value of the iPhone 4 cases it said last Friday that it would give away–about $175 million worth. This will be recognized in the December quarter.
• ”We’re very confident in our new product pipeline,” says Oppenheimer.
• Tim Cook says 80 percent of the Fortune 100 are either deploying or piloting the iPhone. Fifty percent are doing the same with iPad. “It’s incredible,” he adds.
• The company is working hard to deal with supply constraints for some products. “We’re selling iPads and iPhones as fast as we can make them…we’re working around the clock to try to get supply and demand in balance….High demand is a good problem to have,” says Cook.
• Here’s an interesting question: Why do you run out of products all the time? Cook: “We do not create product shortages to create buzz….I’m not sure where that idea is coming from. We’d like to put our products in the hands of everyone who wants them….Demand for the iPhone 4 has been incredible and we’re doing our best to catch up.”
• Any changes in demand since antennagate?

  Cook: “Let me be perfectly clear: We are selling every unit we can make, currently.”

  Follow up: So you haven’t seen any slowdown in order rates, or any increase in returns?

  Cook: “My phone is ringing off the hook with calls from people who want more supply.”

• Cook on iPad sales: “It is not following a typical early-adopter curve and then taking a long time to cross into the mainstream….Our guts tell us that this market is very large, and we believe that iPad is really defining it. We want to take full advantage of this momentum so we’re investing in it quite a bit.
• Any signs of cannibalization? Too early to tell, says Cook, who notes that the company just reported its best Mac quarter ever at the same time it sold 3.3 million iPads. “For us, that’s a jaw-dropper.”
• What’s the mix of 3G versus Wi-Fi iPads? Won’t say, but average sale price for iPads this quarter was about $640. Any mathletes out there willing to extrapolate from that?
• North Carolina data center should be completed by the end of the calendar year.
• How long will the current demand for the iPad persist given the rival devices now coming to the market? Cook: “On the iPad we are absolutely selling every unit that we can make….It’s no secret that everybody is trying to work on something…but we’re extremely happy with our competitive position.”
• Worried about all the press Android devices have been getting? Cook dodges, says iPhone sales were up 61 percent this quarter, growing faster than the overall smartphone market, as gauged by IDC.
• Macs are selling really well. “In Asia Pacific, Macs grew 73 percent year-over-year,” Cook says. “In China, we grew 144 percent, Korea, 184 percent. In Hong Kong we almost doubled. Even in Spain, with difficult economy, Mac grew 59 percent.”
• IPhone doing well in all of the key markets. In Spain, will go from a single carrier to three carriers.

I know this because on Friday I was part of a small group of journalists given a tour of the company’s antenna design and testing facilities, which are as impressive and confounding to an outsider as you would expect them to be–massive anechoic chambers, CT scanners, prosthetic heads and hands filled with fluids designed to match the dielectric characteristics of the human body, all manner of RF measurement equipment and similarly equipped vans for field testing.

The facilities are referred to internally as “black labs,” because their purpose has never been publicly disclosed. Quipped an Apple PR rep, “The existence of this lab used to be secret. Now it’s not.”

And as Friday’s revelations went, that was perhaps the most interesting of all.

Because it’s not like Apple (AAPL) to pull back the curtain like this. Nor is it like Apple to make so many executives available to answer questions. Leading Friday’s golden-ticket tour, Ruben Caballero, a senior director of engineering responsible for antenna design. Also on hand and answering questions: Bob Mansfield, senior VP of Mac Hardware Engineering; Phil Schiller, senior VP of Worldwide Product Marketing; and Greg Joswiak, VP of iPod and iPhone Product Marketing.

That’s hardly the behavior of a company whose obsession with secrecy borders on monomania. And it says something about how much of an affront the criticisms of the iPhone 4’s antenna design have been to Apple.

“Right now the state of the art of the industry is that no one has solved this [attenuation] problem,” Steve Jobs said during the preceding press conference. The tour of Apple’s black labs bore that out. Caballero said the iPhone 4 spent two years in those labs before it was released to the public. Two years. The company tested the hell out of the device and any suggestion that it didn’t is ludicrous. Apple was clearly well aware that the iPhone 4 could suffer some signal degradation when held a certain way, but in its eyes, that is the original sin with which all cell phones are born. Let he who is without sin cast the first phone, right?

Of course, this is precisely what Apple wants me to say. And based on Apple’s unusually frank and detailed elaborations, it rings true. Smartphone antenna design requires compromises.

The trouble is, the public doesn’t expect compromises from Apple.

Nokia
Antenna design is a complex subject and has been a core competence at Nokia for decades, across hundreds of phone models. Nokia was the pioneer in internal antennas; the Nokia 8810, launched in 1998, was the first commercial phone with this feature.

Nokia has invested thousands of man hours in studying human behavior, including how people hold their phones for calls, music playing, web browsing and so on. As you would expect from a company focused on connecting people, we prioritize antenna performance over physical design if they are ever in conflict.

In general, antenna performance of a mobile device/phone may be affected with a tight grip, depending on how the device is held. That’s why Nokia designs our phones to ensure acceptable performance in all real life cases, for example when the phone is held in either hand. Nokia has invested thousands of man hours in studying how people hold their phones and allows for this in designs, for example by having antennas both at the top and bottom of the phone and by careful selection of materials and their use in the mechanical design.

Research in Motion
Apple’s attempt to draw RIM into Apple’s self-made debacle is unacceptable. Apple’s claims about RIM products appear to be deliberate attempts to distort the public’s understanding of an antenna design issue and to deflect attention from Apple’s difficult situation. RIM is a global leader in antenna design and has been successfully designing industry-leading wireless data products with efficient and effective radio performance for over 20 years. During that time, RIM has avoided designs like the one Apple used in the iPhone 4 and instead has used innovative designs which reduce the risk for dropped calls, especially in areas of lower coverage. One thing is for certain, RIM’s customers don’t need to use a case for their BlackBerry smartphone to maintain proper connectivity. Apple clearly made certain design decisions and it should take responsibility for these decisions rather than trying to draw RIM and others into a situation that relates specifically to Apple.

HTC
The reception problems are certainly not common among smartphones. [Apple] apparently didn’t give operators enough time to test the phone.

Samsung
Based on years of experience of designing high quality phones, Samsung mobile phones employ an internal antenna design technology that optimizes reception quality for any type of hand-grip use.

In a statement given to the Korea Herald, the company specifically addressed issues with the Omnia 2, which was featured in the Apple press conference.

The antenna is located at the bottom of the Omnia 2 phone, while iPhone’s antenna is on the lower left side of the device. Our design keeps the distance between a hand and an antenna. We have fully conducted field tests before the rollout of smartphones. Reception problems have not happened so far, and there is no room for such problems to happen in the future.”

Motorola
It is common knowledge in the industry that antennas on the outside of products have known issues, and despite the fact that they lead to smaller phones we have avoided them because consumers don’t like being told how to hold the phone. While the whole industry has to deal with phones being held in different ways, it is disingenuous to suggest that all phones perform equally. In our own testing we have found that Droid X performs much better than iPhone 4 when held by consumers.

Quite a barrage of rebuttals and no doubt exactly what Apple had hoped to elicit when it plotted the messaging of Friday’s press conference. Note that none of them really deny the death grip issue. For the past few weeks that issue has been a storyline for Apple alone, now it’s everyone else’s as well. Already there’s video circulating of RIM’s forthcoming BlackBerry 9800 suffering from it.

As Dilbert creator Scott Adams wrote today, “If Jobs had not changed the context from the iPhone 4 in particular to all smartphones in general, I could make you a hilarious comic strip about a product so poorly made that it won’t work if it comes in contact with a human hand. But as soon as the context is changed to “all smartphones have problems,” the humor opportunity is gone. Nothing kills humor like a general and boring truth.”

Apple’s (AAPL) iPhone 4 death-grip drama came to a head this morning at a news conference at which Steve Jobs, saying no smartphone was immune to antenna issues, promised free cases for all owners and a liberal return policy. Here’s the the live blog.

[Update: Apple has provided a video of the presentation on its Web site. It's not embeddable, but here's the link.]

9:40 am: We’re here at the Apple (AAPL) campus in Cupertino. The assembled press, a smaller crowd than usual, is waiting to enter Building 4 for the event.

10:00 am: Inside the auditorium now. This is easily the smallest Apple event I’ve ever attended — there are actually empty seats.

A quick scan of the front row reveals pretty much all of Apple’s executive bench to be in the house: Tim Cook, Bertrand Serlet, Bob Mansfield, Scott Forstall and Phil Schiller.

10:04 am: The event begins with a music video: “The iPhone Antenna Song.”

It’s a sing-a-long: “If you don’t want an iPhone 4, don’t buy it. If you don’t like it, bring it back.”

10:06 am: And Jobs takes the stage with a big grin on his face. “We saw that video on YouTube and couldn’t help but share it.”

10:06 am: “We’re not perfect,” says Jobs. “We know that and you know that. Phones aren’t perfect either….We want to make our users happy. That’s what Apple is all about.”

10:07 am: The iPhone 4 is perhaps the best product we’ve ever made at Apple and we’ve sold over three million since we launched it just three weeks ago, he says, noting that the device has been well reviewed in major publications and has a high satisfaction rate to boot.

10:08 am: “However,” says Jobs, “we began getting reports about antenna issues…and this has since been dubbed ‘antennagate.’…We heard about this just 22 days ago and Apple is an engineering-driven company and the way that we work is that we want to understand what the problem is before we come up with a real solution.”

10:09 am: “We’ve been working our butts off for the past few weeks to do that with antennagate.”

Jobs notes that attenuation problems are not unique to the iPhone 4. He rolls some videos demonstrating similar signal deterioration when a BlackBerry Bold is held in a particular way.

Another video, this one of the HTC Eris. Again the phone’s bar display drops drastically when held in a particular way.

10:12 am: Same thing with the Samsung Omnia. “It’s got 4 bars to start,’ says Jobs. “We grip it in a familiar way and the signal drops.”

10:13 am: “These phones were all tested in areas of relatively weak signal strength and they all dropped bars….This is life in the smartphone industry….Smartphones are not perfect.”

10:14 am: Jobs suggests that the controversy over the iPhone 4′s antenna issue is partially the result of the fact that the “dead spot” is so easily visible on the iPhone 4′s exterior. “X marks the spot,” he says.

10:16 am: A quick overview of Apple’s state-of-the-art antenna lab, which is pretty impressive looking. “This is a state of the art antenna test facility,” Jobs says. “We have 17 anechoic chambers. These things are not cheap. We have invested over $100 million in antenna testing facilities over the past 5 years. We have 18 PhD scientists and engineers on our staff. And so the iPhone antenna went through all of this. We tested it. We knew that if you gripped it in a certain way, the bars are going to go down a little bit, just like every smartphone. We didn’t think it’d be a big problem, because every smartphone has this issue.”

10:17 am: Jobs notes again that antenna design is a challenge for the entire industry. “Smartphones have weak spots….You can grab them in the course of normal use and you will drop reception.”

A quick discussion of AppleCare statistics on iPhone 4 user antenna/reception complaints. “If you’ve read the media coverage you’d think, Jesus, at least half of our customers have called in to complain,” says Jobs. “So what’s the real percentage? 0.55 percent.”

10:20 am: And what of return rates? Jobs notes that AT&T (T) has a buyer’s remorse program that allows users to return their phone if they’re unhappy with it. So what have AT&T’s return rates been like for the iPhone 4?

Jobs says return rates for the iPhone 3GS were 6.0 percent, which is below the industry average.

Return rates for the iPhone 4: 1.7 percent.

“That’s less than a third of the return rates for the iPhone 3GS,” says Jobs.

10:22 am: A final data point. A dropped call metric from AT&T. “How do call drops on iPhone 4 compare to those on the 3GS?” asks Jobs. “I can tell you that even though we believe the iPhone 4 is superior to the 3GS, the iPhone 4 drops more calls per hundred than the 3GS.”

10:24 am: So how many more calls does it drop?

Here’s the hard data, says Jobs. “The iPhone 4 drops less than one additional call per hundred than the iPhone 3GS.”

“Now even less than one is too much for us, but this does put things in perspective,” Jobs adds.

10:25 am: Noting that there are fewer third-party cases available for the iPhone 4 than the iPhone 3GS at launch, Jobs theorizes that the number of caseless iPhones on the street has further exacerbated the iPhone 4′s reported reception issues. “So, I have my own pet theory on this, which we have no proof of, but I’ll give it to you anyway,” he says. “When the iPhone 3GS came out, we did not change the design from the iPhone 3, and there was a healthy market of cases for the iPhone 3G that fit the 3GS perfectly because the design didn’t change. And in our stores, 80 percent of the iPhone 3GS users walked out with a case. iPhone 4 has a radically new design; none of the old cases fit. Since we didn’t show it to anybody, none of the new cases are ready, and we can’t make enough of our bumper cases. And so in our stores, about 20 percent of the people are going out with a case. And I think that has something to do with this disparity.”

10:27 am: Now a quick overview of the data points offered so far:

Smartphones have weak spots
Few complaints to AppleCare
Few returns to AT&T

“So this issue is affecting a small percentage of our users,” says Jobs.

10:28 am: “But we are about every user” says Jobs. “So what are we going to do?”

First: The update to iOS 4 Apple released yesterday.

Second: We’re going to give everyone a free bumper case. “One for every iPhone 4…if you’ve already bought one, we’ll give you a refund… through Sept. 30.”

10:30 am: “We will send you a free case,” says Jobs. ” But we can’t make enough bumpers…so what we’re going to do is offer users a choice of cases.”

Users can apply for a case on the Apple Web site beginning next week.

10:31 am: “And if after that,” says Jobs, “you are still unhappy with your iPhone, you can return it for a refund and we’ll waive the restocking fee.”

10:31 am: And now a few other iPhone 4 updates. Jobs mentions complaints about the proximity sensor. He says the company plans to have a fix for it soon.

10:32 am: The white iPhone 4 will begin shipping later this month

10:33 am: And finally, on July 30, Apple will begin shipping the iPhone 4 to a number of new countries.

10:33 am: On to final remarks now: “We love our users,” says Jobs. “We do our best to delight and surprise them. We work our asses off for our users.”

He runs through a list of Apple innovations, notes what the company has done for the retail experience (free Genius Bar appointments, One to One service, etc.)

“And when we fall short,” he adds, “we try harder. And when we succeed they reward us by staying our users….So when we have problems like this, we take it really personally….We all read this stories, and if a user is having a problem, it’s our problem….So we’ve been working really, really hard for the past 22 days to understand the problem and solve it, and we think we’ve gotten to the heart of the problem: Smartphones have weak spots.”

10:37 am: “The data supports the fact that the iPhone 4 is the best phone in the world,” Jobs concludes. “There is no antennagate; there’s a challenge for the entire industry to improve their phones to where there are no reception issues.”

10:38 am: Moving on to the Q&A now.

First question: How’s your health, Steve?

“I’m doing fine…feeling great.”

10:38 am: Considering any changes to the antenna design?

Jobs: “We’re pretty happy with the antenna in the iPhone 4; it’s better than the iPhone 3G’s antenna in almost every way….We’re getting lots of reports from customers who say their reception has actually improved…so we’re not feeling right now that there’s a giant problem we need to fix.”

Jobs: “We have a lot of iPhones in a lot of hands and most people don’t seem to be having problems.”

10:41 am: A question about grip variation. Why does touching the antenna with a single finger sometimes cause signal to drop?

“The body is an effective signal absorber…so the fact that you’ve bridged the gap between the antennas, you’re attenuating the signal.”

10:43 am: A question referencing yesterday’s Bloomberg article: Was Jobs warned about potential iPhone antenna issues?

“You’re referring to the Bloomberg article,” Jobs replies. “Yeah, that was a total crock. We challenge them to come up with any evidence to prove it….I talked to Rubin (the antenna engineer mentioned in the article) and he says it’s total bullshit from his point of view as well.”

10:45 am: Is Apple apologizing to its customers and investors?

Jobs: “I apologize to our customers … But investors … We want investors for the long haul. To those investors who bought the stock and are down $5, I have no apology. … We make great products, and if we hit a bump in the road…it’s just like having kids.”

10:46 am: Q: Is Apple a company that makes users choose between form and function?

Jobs: No. We are a company that likes to do both. You know, you look at an iPod touch and it’s wonderfully thin and it costs us extra to do that well, but we do it. The iPhone 4 antenna is an exterior antenna that doesn’t use internal space, so we can use that additional space for battery, storage, etc. We try to have our cake and eat it too.

10:48 am: Q: Is AT&T giving full refunds to unhappy iPhone 4 users and allowing them to break their contracts?

Jobs: I believe so.

10:50 am: “What we’re learning through this process is that part of our role as an industry leader in this space is to educate,” says Jobs. “So that’s what we’re doing. We’re gathering data and sharing it…and we will continue to devise products that have fewer of these issues, but right now to our knowledge it’s not possible to design a phone that does that….I mean you could make a really, really big phone…a Hummer of a phone, but then no one would want to buy it.”

10:51 am: Jobs says, “I can tell you right up front, we are not perfect. We are human…we make mistakes….We don’t know everything, but we figure things out pretty fast…and we love our customers and appreciate them. We don’t take them for granted and we work hard to keep them.”

10:53 am: Q from Consumer Reports: Does the refund apply to third-party cases?

Jobs says no. Because there are very few third-party cases available, there aren’t really enough in the market to justify a refund.

10:56 am: Q for the team: Do any of you carry your iPhone 4s with bumpers?

Cook, Jobs and Mansfield all raise their phones and none of them has a case. (Laughter)

10:57 am: Give this debacle, what will Apple do differently with its next product launch.

Jobs says he needs to get a little distance before he can really speak to that.

“We were stunned and upset and embarrassed by the Consumer Reports stuff that came out this week, but we didn’t need that to know that we had to take care of our customers….But we weren’t silent because we were ignoring it, we were silent because we were working to understand it….If we had spoken out on this a week ago, we wouldn’t have had the data we needed….Some people have wanted us to run a little faster, and honestly I don’t think we could….We have people here all night…there are cots in the engineering department.”

11:00 am: More from Jobs–”One thing I’ve learned is that when there’s a successful organization, people want to tear it down….It’s happening to Google now. Google’s a great company, but people are tearing them down. They’re doing the same thing to us. … What’s the purpose in that?…Would you prefer, that we’re a Korean company? Do you not like the fact that we’re an American company leading the world right here? …Sometimes I feel that these Web sites in search of eyeballs don’t know what they leave in their wake….We’ve been around for how many years? Don’t we have the trust from the press that we will address issues like this when they arise? I didn’t see that this week….Now we weren’t innocents in this, but the reaction to this based on the data we have has been so overblown that to digest it and determine what we can do better is going to take us some time.”

11:04 am: Jobs reiterates that the number of customers encountering iPhone 4 attenuation issues is small, but that the company still wants to make them happy. Hence today’s announcement of free iPhone 4 cases.

11:05 am: Q–Did you even consider a recall?

Jobs: “You know when you love your customers as much as we do, nothing is off the table. But we are a data-driven company.”

Jobs describes Apple’s efforts to track this issue, talks about sending engineers across the country to analyze it and develop a solution. Evidently, in some cases engineers were dispatched to the homes of customers who’d complained about attenuation.

“We called them first, of course,” jokes Mansfield.

11:08 am: Question about a possible software fix for signal attenuation. This was mentioned in the New York Times report this morning.

Jobs takes issue with the question, stresses that attenuation is an industrywide issue.

Scott Forstall steps up to address the Times article and the “latent software issue” it mentions. “That’s patently false,” he says.

Jobs chimes in: “One of many such statements we’ve seen over the past week.”

11:12 am: Jobs says, “We can’t make the iPhone 4 fast enough….We are way behind demand.”

11:13 am: Q–What impact will this have on your bottom line?

Tim Cook: We’re announcing results next week. We’ll hold off on discussing things like that until then.

11:15 am: Question about iPhone 4 sales.

Tim Cook: “We are selling every phone we can make right now.”

11:18 am: Jobs–”If you don’t own the primary technology, the company that does is going to beat you in the end….We want to own or control the primary technology for the businesses that we’re in….We decided that for us, software was the most important component….So we brought software to the phone business in a way that hadn’t been seen before….So we’ve been able to create and frictionlessly distribute software updates seamlessly since the iPhone first launched….We were the first ones to really do that in a practical way.”

11:22 am: A question about the recent spike in Jobs’s emailing Apple customers. Has Apple shifted the way it communicates with its customers?

Jobs: I get a lot of emails, my email address is out there, and sometimes I answer them. And now people have begun posting them to the Web–which is rude. And now there’s this new phenomenon, where people are just making them up. But this is something I’ve always done.

11:25 am: So was that helpful, Jobs asks the audience before delivering a final quip:

“I wish we could have done this in 48 hours, but then you wouldn’t have had as much to write about.”

And that’s it. The event’s ended.

PREVIOUSLY

• iPhone 4 Full Coverage on AllThingsD.com
• What Will Apple Say Tomorrow? Your Guess Is as Good as My Analyst’s.
• Apple Releases iOS 4.0.1 for iPhone, iOS 3.2.1 for iPad
• The Reality Distortion Field Appears to Be Suffering Attenuation Issues as Well
• Analyst: “Highly Unlikely” iPhone 4 Recall Could Cost Apple $1.5 Billion
• Apple Snips Needling Threads From iPhone 4 Forums
• IPhone 4 Recall? Get a Grip!
• Consumer Reports: By the Way, the iPhone 4 is Also the Best Smartphone on the Market
• Duct-Tape Makers Look for Boost From Consumer Reports iPhone Verdict
• Consumer Reports: We Can’t Recommend the iPhone 4
• Apple: Your iPhone 4 Antenna Is Fine, and So Is Your Reception–But We’re Fixing Our Software Anyway
• Grip Different: Apple, AT&T Sued Over iPhone 4 Antenna Issue
• Gripping Antenna Drama Won’t Hold iPhone 4 Back, Says Analyst
• Apple on iPhone 4 Reception Problems: Grip Different

“While the supply chain is aware of the antenna issue, there has been no change in the ramp schedules, which could imply that the fix is simple and does not require a complicated redesign.”

– Sterne Agee analyst Vijay Rakesh says Apple’s iPhone 4 supply chain shows no signs of changes in production plans

“We now believe there is a 50% chance the company offers a free modification to current iPhone owners and includes the modification on all future iPhone 4s (e.g. a coating around the antenna),” Piper Jaffray analyst Gene Munster told clients today. “We have no knowledge of the company’s plans,” he said, “but we see an in-store fix and modification to future iPhones as the likely scenario (not a recall). Despite these issues, consumers love the iPhone 4; ultimately we believe Apple will manage these issues in a consumer-friendly way and maintain its pristine brand.”

UBS analyst Maynard Um isn’t betting on a recall, either.

“We believe a recall is unlikely as any recall would presumably be more immediate and sales halted by Apple and its operator partners,” he wrote in a research bulletin. “However, if the solution were straightforward, investors are likely to wonder why it wouldn’t be issued by press release (though Apple already addressed the issue in a statement on July 2). We believe an event is necessary, as a press release to address what has become a ‘loud’ issue would likely have drawn more ire.”

And from the shadowy world of anonymous insiders, a “person familiar with the matter” tells the Wall Street Journal that a recall is not in the company’s plans.

Sounds about right. As I wrote the other day, “an iPhone 4 recall? Steve Jobs would rather recall hiring John Sculley.“

[Image credit: Rick Smolan]

Looks like Apple (AAPL) has decided it needs to see some iPhone headlines that don’t include the word “antenna.”

On the eve of the iPhone 4 press conference it is holding tomorrow, the company officially released iOS version 4.0.1, a software update it says “improves the formula to determine how many bars of signal strength to display” on the device and its predecessors (click images to enlarge). The update also resolves an issue that could cause slow syncing of data with Exchange ActiveSync.

Released in tandem with iOS 4.0.1 was iOS 3.2.1 for iPad, an update that adds Bing to Safari’s search options and promises to improve Wi-Fi connectivity as well.

“The burden for consumers caused by this glitch, combined with the confusion over its cause and how it will be fixed, has the potential to undermine the many benefits of this innovative device. To address this concern, I ask that Apple provide iPhone 4 customers with a clearly written explanation of the cause of the reception problem and make a public commitment to remedy it free-of-charge.

“The solutions offered to date by Apple for dealing with the so-called ‘death grip’ malfunction–such as holding the device differently, or buying a cover for it–seem to be insufficient. These proposed solutions would unfairly place the burden on consumers for resolving a problem they were not aware of when they purchased their phones.”

– Democratic New York Senator Charles Schumer, in a play for a little PR, ahem, facetime