Acknowledging that there is a problem with the iPhone 4's antenna design, Apple today said it would offer free cases for the phone to mitigate against signal loss  when the device is held in a certain way.

In a news conference at Apple headquarters in Cupertino, CA, CEO Steve Jobs reiterated the company's earlier claim that all smartphones have similar problems, and that "no one has solved this problem."
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Jobs said the company's engineers have been "working our butts off so we can come up with real solutions" to the antenna issue, and are continuing to do so. In the meantime, Apple will offer a free case to all customers who've purchased an iPhone 4 since its introduction on June 24th. "We're going to send you a free case. We can't make enough Bumpers. So we're going to source some cases and give you a choice."

In recent tests, sparked by consumer complaints, Consumer Reports confirmed the iPhone 4's signal-loss problem, and also determined that the Bumper is able to alleviate the issue.

Apple will also offer refunds to customers who have already bought the Bumper, Apple's only case for the iPhone 4. Those who have already bought third-party cases are not assured of a refund, though Jobs said those who did want their money back can write to Apple and "we'll consider the request."

Jobs said that free cases would be available on the Apple website by the end of next week, to all customers who purchase iPhones prior to September 30th. After that date, he said the company would "reevaluate" the issue. "Maybe we'll have a better idea," he said.

While Jobs acknowledged the signal loss problem caused when users touch a specific area of the phone's external antenna array, he said that it affects "a very small number of users," and that the issue can be avoided by not touching the phone in that area.

Consumer Reports believes Apple's offer of free cases is a good first step. However, Apple has indicated that this is not a long-term solution, it has guaranteed the offer only through September 30th, and has not extended it unequivocally to customers who bought cases from third-party vendors. We look forward to a long-term fix from Apple. As things currently stand, the iPhone 4 is still not one of our Recommended models.