According to Apple Inc., buyers of the new iPhone 4 will be entitled to free protective cases that would alleviate the antenna issues that have been plaguing the new smartphone.

Apple CEO, Steve Jobs, made the announcement on Friday in an eagerly anticipated press conference. He stated that the three million people who have already purchased the phone, as well as new buyers will be eligible for the free case until September 30.

He also stated that those iPhone 4 users who have already purchased the ‘Bumper’ cases will be refunded. The ‘bumper’ is a rubber and plastic band that wraps around the phone and reportedly fixes its antenna issue.

Complaints about the iPhone 4 started streaming in just hours after the phone’s release on the 24th of June. Despite this, it quickly became the company’s fastest selling product to date.

The iPhone 4’s unusual external antenna design saw calls being dropped and signal being lost when users held the phone covering the bottom left corner of the device. Apple’s predicament only worsened when it initially stated that users should simply hold the phone differently.

Jobs admitted on Friday that there was a problem with the signal algorithm of the phone, but denied that the antenna design itself was faulty.

The iPhone 4’s woes worsened when leading technology reviewer, Consumer Reports, stated that they could not recommend the iPhone 4, something it has done with every previous iteration of the smartphone.

Consumer Reports noted that touching the iPhone’s antenna, which wraps around the device, downgraded its signal. It later recommended that sheathing the device in a case, or even sticking a piece of duct tape over the lower left part of the phone seemed to alleviate the problem.

In his press conference Jobs also went after rival manufacturers, stating that this problem wasn’t exclusive to the iPhone. During the event he played videos showing devices from Research in Motion (makers of BlackBerry), Samsung and HTC also suffering from signal strength problems when held in a certain way. See how they responded in our coverage of the story here.

Jobs, who doesn’t use a bumper in his device, stated that customers would be able to choose the colour bumper they want. While many industry observers called the bumper giveaway the least costly solution, it remains to be seen whether this will satisfy the iPhone 4’s user base.