Apple set up a web page and deployed a special iPhone app that lets iPhone 4 owners know how to get the promised case, which prevents users from touching the antenna band that encircles the smartphone's edges. Consumers complained that signals dropped when their finger touched the bottom left side of the phone.

Apple will give away free cases to anyone who buys an iPhone before Sept. 30. But users have to download the app for the App Store in order to get the free case. Users can choose a rubber bumper or one of several plastic cases from third-party vendors Apple works with. The cases should ship in three to five weeks.

There's an App for That

Avi Greengart, an analyst at Current Analysis, calls Apple's moves clever. Clever in the sense that Apple has run ads saying, "There's an app for that." And now there is even an app that placates irate iPhone 4 consumers. Apple has information stored about which devices have been registered, Greengart said, so an app is a clever and convenient way for both consumers and Apple to handle the issue.

"Apple is handling this in such a way that the user doesn't have to jump through too many hoops," Greengart explained. "If you bought your case via credit card, they are automatically refunding that so you don't have to do anything at all. If you bought it from AT&T, then you actually have to fill out a coupon the way a normal offer might be fulfilled. But if you haven't gotten a case yet, you can just fire up that app and you should be good."

A $175 Million Mistake

Apple set aside $175 million to cover the so-called Antennagate problem. But Apple isn't just spending money to cover the problem, it's also losing profits. The cases retail for $29.99 at the Apple Store.

Apple was expecting to generate revenue from the sale of the bumper cases with the fourth-generation iPhone. Apple hadn't previously sold cases direct or benefited from their sale. Now Apple is watching those potential profits erode.

"This is the right move. This is more of a public-relations disaster than a product problem. I am not saying the issue isn't real. It's absolutely real. If you put your finger on the antenna, you will see the signal drop," Greengart said. "But I did not believe it would affect sales, and it hasn't."

It's not clear if Apple plans to make some change to the design after Sept. 30. What we do know is the white iPhone 4 models have been delayed. In a statement, Apple said, "White models of Apple's new iPhone 4 have continued to be more challenging to manufacture than we originally expected, and as a result they will not be available until later this year."
 

Peter Crown: