10:48 The iPhone 4 antenna is an exterior antenna, which doesn't use internal space, so we can add more battery and give it a longer battery life. And there are some other advantages too. It's the thinnest smartphone in the world. So we try to have our cake and eat it too. We try to have great design and great performance. And if you look at our products, that's what we deliver.
10:48 Q: AT&T plans will be refunded too? A: Yes. AT&T is giving full refunds, yes. And through Apple as well.
10:48 Q: And people can get out of their contracts? A: I believe so, yes.
10:50 (Missed the Q) I don't know what there was we could have said. Maybe we could have set the expectations appropriately, that most smartphones have weak spots. We certainly could've shipped the phone with a better algorithm to calculate the bars, so it didn't look so dramatic. But most smartphones seem to have the same characteristic as the iPhone 4. When you grip them in a typical way they lose some signal strength when you're in a low-signal area to begin with. The iPhone 4 seems no different.
10:51 Right now to the best of our knowledge, it's not possible to make a smartphone that doesn't have weak spots. Well, I think you could make a big one that wouldn't fit in your pocket. Some of these guys are making Hummers now. You could make a big Hummer that you couldn't get your hand around it, but nobody would want to buy it.
10:52 But the press that's surrounded this. Maybe people thought we were perfect, and they saw this as an example where we weren't, and thought it would be fun to jump on it. Let me tell you, we are not perfect. We are human. And we make mistakes sometimes. And we don't know everything. But we figure it out pretty fast. And we take care of our customers.
10:52 This is why we have the best and most loyal customers in the world.
10:53 Q from Connie at Bloomberg: Why Sept. 30 for case limit? A: We just are going to wait and see, maybe we'll have a better idea. It's just a chance to say we'll reevaluate it in September.
10:53 (Interesting, Connie G. is on the byline for the story that was referred to as "total bullshit" previously.)
10:54 Q from Kevin McKean at Consumer Reports: What about refunds on third-party cases? A: No, but it's a very small number of those cases that are out there. We wish it would've been hire, because then there would be more cases out there.
10:55 McKean: It's very hard to get cases right now. If Apple had given the dimensions of the phone earlier, then there'd be a bigger supply of cases. A: As a consumer electronics manufacturer, if we tell the world what our future products are going to be, they tend to stop buying our current products. And if they [do that], then we have a crisis and have to focus on that and stop focusing on new products... so in general, we don't tell people about new products until they're just about ready to go.
10:55 You know, sometimes web sites buy stolen prototypes and put them on the web. And we don't like that. But if we give things to case vendors, they have a history of putting them on the web too. So that's what we run up against.
10:57 Q from John Gruber: Do any of you carry your iPhone 4's with a bumper? A: They all bring theirs out, and none of them have a bumper. (laughter)
10:57 Gruber: I don't have one either.
10:57 Jobs: I got an iPhone 4 and reception in my house is way better, but I hold it like this a lot and I've never had a problem with it, so I'm thrilled. That doesn't mean other people don't have problems, but that's been my experience.
10:59 Q: What have you learned? Jobs: We always knew how much we care about our customers. We were stunned and upset and embarrassed by the Consumer Reports stuff that came out this week, but we didn't need that to tell us to take care of our customers. The fact we didn't say anything after a week, it's because we didn't know enough. And it's taken us a while to get the data. If we'd have done this a week and a half ago, we wouldn't have had half the data that we shared with you today.
10:59 I'm sure in a few weeks we'll have more data. We're an engineering company. We think like engineers. We create stuff like scientists and engineers. And we love it. And we think it's the right way to solve real, and hard, problems.
11:00 I don't think that's going to change at all. That stuff is just operating like it normally does, and some people have wanted us to run a little faster. I don't think we can run any faster. I've seen cars in the parking lot late at night, cots in some of the engineering offices. I don't think we could've worked any harder.
11:01 But I guess it's just human nature when some organization gets successful, there's someone who wants to tear it down. I see it happening with Google. Why are they doing that? Google's a great company. Google invented all of this great stuff that we love to use. And I see them jumping on us now. Would you rather we are Korean companies rather than American companies? Do you not like that we're innovating here in America?
11:01 (I assume there's a reference to Chuck Schumer in there somewhere.-j.s.)
11:02 In search of eyeballs for websites, people don't care what they leave in their wake. So I look at this whole thing and say, wow. Apple's been around for 34 years. Haven't we earned the credibility and trust from some of the press to give us a little bit of the benefit of the doubt, of our motivations, the fact that we're confident and will solve these problems. I think we have that trust from our users, but I didn't see that in the press. This thing was blown so far out of proportion. But I'm not going to say we're not at fault. We didn't educate enough.
11:03 And we painted a big target on ourselves. And that someone who had it in for us was going to put videos on their web site and say, do this. So we were not innocents in this. But.
11:03 Based on the data we have, this has been so overblown... so to digest this is going to take a few weeks, maybe. And we could use your help. We'd like to know, maybe you can tell us, can we do better at this?
11:05 Q: Possible for hardware fix for this product? A: Right now, the state of affairs in this industry, nobody has solved this problem. We'd like to be the first. Maybe. We'll see. But most of our customers aren't experiencing, and the ones who are, many of those are in test mode, duplicating what they saw on the web.
11:07 Q: Did you consider a recall? A: When you love your customers as much as we do, nothing's off the table. But the way we work is to be data driven. We want to go find out what the problems are. We've sent people all over this country to visit customers. I get e-mails, "My phone isn't working right, I don't have reception," I dispatch them to my engineers, they've sent teams all over the country, visiting these people in their homes. These people literally get a knock at their door from Apple engineers with a bunch of equipment and want to plug it in and test reception. We're really serious about this.
11:07 So again, that's who we are. And we try to find out the truth of the matter. And then we do whatever it takes to take care of our customers.
11:07 Mansfield: For the record, we told them we were coming. Jobs: And we didn't bash down any doors.
11:08 Q about returns at Apple Stores. A: Cook says there were fewer than 3GS.
11:11 Q from Josh at Engadget: Report in NYT about different software fix. Is it possible? Or is this hardware or nothing. A: [Jobs complains about Josh's characterization.] Could we leap ahead of every smartphone by having better software on our phone? I'd love it. Josh: I'm citing the Times article. Jobs: You like to talk to yourselves a lot. But they're just making things up.
11:12 Scott Forstall appears: NYT says a latent software issue between the baseband and the AP, and that's patently false. There's no latent issue. As far as, can we continue to tune? We do that all the time. I would love for us to continue to work with carriers to improve how we hold calls, and we always are. But that story about a bug is patently untrue.
11:12 Jobs: One of many statements in the past few weeks that fall into that category.
11:13 Jobs: We can't make 'em fast enough. We are way behind demand. And probably the only thing we've gotten more emails on other than this lately, is customers who are upset that they have to wait for their iPhone 4.
11:13 Jobs: Reminds you of the Woody Allen movie. The food here is terrible, and gosh, the portions are so small.
11:13 Ben from Mashable asks: What kind of impact do you think this will have on the bottom line?
11:14 Cook: We'll be announcing Q3 results on Tuesday and will be giving guidance on Q4, and we'll hold financial stuff till then.
11:14 Hank from Marketwatch: Has there been a slowdown in sales? Due to shortages? Or an impact in sales in the past week? Jobs: We were able to build up a supply before the launch date, but the run rates we were at weren't 1.7 million every three days.
11:15 Cook: The 1.7 was a fairly precise number. This number is "well over 3 million." Jobs: I'm just trying to give you a feel for the fact that this is our most successful product launch and demand looks beyond what we're capable of supplying, and that hasn't changed. Cook: We are selling every phone we can make right now.
11:16 Jobs: John Markoff! Nice to see you. Markoff: I've had an iPhone in a heavily congested cell in SF for a long time. I'd like to know if the handset has any role in congestion management. Separate from the iPhone 4 and iPhone 3 issue. Does the stack play no role in the management of congestion?
11:17 Jobs: When AT&T wants to add a cell tower in Texas, they say it takes about 3 weeks. When they want to add a cell tower in SF, the average time to get approval is 3 years. Not all of us want cell towers in our backyard, but we all want good reception. They've tried to make them look like banana trees, but still, it's a problem.
11:17 Jobs: AT&T can't expand their networks beyond a certain point unless they put up more antennas, and that can be a very long process. And I know, because we're constantly asking them about SF and the bay area, and it's one of the toughest spots to get approvals. Sometimes I think they should enlist the support of all the iPhone users in the community.
11:19 To understand Apple, one of our biggest insights came about 8 years ago. We didn't want to get into any business where we didn't own or control the primary technology. Because if someone else owns it, they're going to beat you in the end.
11:20 And in the computer business, we thought software was the most important tech. And we made our own OS. Our big insight 8 years ago was that for most areas of consumer electronics, it was going to shift from big displays or optical pickup heads for DVDs being important, or radios in cell phones, to software being the most important component. And we realized, we were pretty good at software.
11:20 And so the iPod really proved that to ourselves, that we could do that, and we brought that to the phone business.
11:21 We really made the whole process of being able to update your software an order of magnitude easier than it was before. So we've been able to frictionlessly distribute major updates for the software for the iPhone, continuously, and have been able to fix bugs, improve performance, add new features... all for free. And everyone's copying Apple now, but we were the first ones to really do that in a practical way.
11:21 The formula we use to calculate bars has been off from the beginning. And the update for 4.0.1, fixes it for the 4, 3GS, and 3G.
11:23 Fortune/CNBC: You've been communicating more via e-mail. Can you talk about whether you've shifted the way you communicate with Apple's customers? Jobs: I get a lot of emails, and I always have on some occasions replied to some of them. I can't reply to a lot of them, because I've got a day job. At some point people started posting on the web, which is a little rude, to be honest. And now the most recent phenomenon is, people are making them up. So don't believe everything you read.
11:24 I try to reply to some of them just because, you know, they're our customers. So it's pretty hit and miss.
11:24 Stokes from Ars Technica: Will the free case offer extend outside the US? Jobs: Yes, it's international.
11:25 Jobs: Well, thank you for coming this morning. Has this helped? Great. I wish we could have done it in the first 48 hours, but then you wouldn't have had so much to write about. Anyway, thank you.
11:25 Applause, music, and that's it.
11:25 Thanks everyone for being here.
11:25 And thanks to your kind comments on Twitter about my liveblogging.
11:25 My fingers are numb now. :-)
11:26 Stay tuned to Macworld for all the latest on Apple and Apple products.
11:26 Until next time, good morning from Cupertino, and farewell.