Apple Engineer Said to Tell Jobs IPhone Antenna Might Cut Calls

By Peter Burrows and Connie Guglielmo
(c) 2010 Bloomberg News
Thursday, July 15, 2010; 12:00 AM

Last year, Ruben Caballero, a senior engineer and antenna expert, informed Apple's management the device's design may cause reception problems, said the person, who is not authorized to speak on Apple's behalf and asked not to be identified. A carrier partner also raised concerns about the antenna before the device's June 24 release, according to another person familiar with the situation.

The latest model of the iPhone carries a metal antenna that surrounds the outside of the device -- a design chosen by Apple executives because it yielded a lighter, thinner handset. It has also resulted in reception problems that led Consumer Reports to refrain from endorsing the iPhone 4, weighed on the company's shares and stepped up pressure on Apple to issue a fix.

Steve Dowling, a spokesman for Apple, declined to comment and said he wouldn't make Caballero available for an interview. Caballero didn't respond to a call and an e-mail seeking comment. Apple plans to hold a press conference tomorrow about the device. Dowling declined to elaborate on what will be discussed.

Apple broke sales records with the iPhone 4, which debuted June 24 in the U.S., the U.K., Japan, France and Germany. The exclusive U.S. carrier is AT&T Inc. Apple's European partners include Vodafone Group Plc, France Telekom SA and Deutsche Telekom AG. Softbank Corp. carries the iPhone 4 in Japan.

In the first three days, the company sold 1.7 million devices, the most for any iteration of its top-selling product.

Tests carried out by one of the phone service providers before the device was released also indicated the antenna might cause reception problems, said a person who asked not to be identified because discussions with Apple aren't public.

Apple, which has built its brand on delivering cool, meticulously crafted designs, may alienate customers as critics continue to point out reception flaws with its device.

Consumer Reports said it isn't recommending the iPhone 4 following tests confirming the handset has a hardware shortcoming that causes signal quality to degrade. The publication has recommended the three previous iPhone models.

Apple, based in Cupertino, California, rose 93 cents to $252.73 yesterday in Nasdaq Stock Market trading. The shares have risen 20 percent this year.

The company's stock fell on July 13 on speculation that the Consumer Reports decision may curtail demand among consumers who are on the fence about whether to buy the iPhone 4. Some blogs and a betting company that tracks odds of events said attention to the shortcoming raises the possibility of a product recall -- a development analysts deemed unlikely.

"The stock is being impacted by general concerns about the impact this is having to the brand, and the financial impact, and the uncertainty about what Apple will do about this," said Andy Hargreaves, an analyst at Pacific Crest Securities in Portland, Oregon. "A product recall is extremely unlikely."

Soon after Apple released the iPhone 4 in June, some customers complained about problems losing their signal. Apple last month advised users to buy a case or avoid gripping it in the lower-left corner "in a way that covers both sides of the black strip in the metal band."

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