May I posit a theory of what's going on? I have no inside information that this is, in fact, what is happening, but it seems to me to be the most plausible theory.
Let me state first that it is a complete impossibility that Apple's engineers "didn't realize" there was a problem with the design. These aren't blind morons throwing together a bunch of parts and saying, "Let's see if this works, guys!" These are some of the best engineers and industrial designers on the planet. First, every design they create is based ON THEORY. They don't just build something and then test it to see if it works. But more importantly, every design coming out of their lab goes through iteration after iteration after iteration after iteration after iteration, each prototype being subjected to rigorous testing IN THE LAB, before even being brought into the field for testing. You can even see this for yourself with the leaked prototype iPhone 4's (which were all extremely late-stage prototypes), which bore the markings "EVT" and "DVT," standing for "Engineering Verification Test" and "Design Verification Test," respectively. Believe me when I say that design-wise, nothing this glaring "slips through" testing
That being said, it IS conceivable that Apple made a conscious decision to prioritize form of over function as I have seen them do a few times in the past (albeit for much smaller considerations than the one at issue). However, I sincerely doubt that that is the case, since much of the known evidence contradicts this blind assumption. Everyone is focusing on this being an inherent issue in the design of the phone, but what I find to be a much more likely explanation is that it is not so much an issue with design as it is with manufacturing. The fact that there have been at least several documented cases of iPhone 4's that don't seem to exhibit the problem suggests this theory to be true, especially since the number of apparently positive cases will always be substantially inflated, given that it's the users WITH the problem who are much more likely to report back than those without it.
Now, it is conceivable that the differences in results among users are due to other variables like location and that the problem would surface among "unaffected" users if those users were to test it in a different environment. But I highly doubt that Apple, or any company for that matter, would deliberately release a product that it knew to suffer a defect in design so severe as to cripple the central functionality of the device--especially since they could, it seems from the preliminary evidence, have maintained the aesthetic appeal of the device and still avoided the issue by more fully insulating the two antennae from each other. Much more likely, in my opinion, is the following:
Apple realized very early on in the manufacturing process that they had a problem (back when they first started ramping up production to significant quantities in early to mid-May). They immediately rectified the issue from there on out, but they then faced a choice: They could either take the iPhones they had already manufactured off the supply line, eat the cost, and, most crucially, delay the launch and suffer a PR disaster; or they could let the defective models come to market.
Apple's being Apple, they would have been extraordinarily reluctant ever to publicly acknowledge there was an issue, so instead, they thought the problem through and came up with a way they could maintain the launch date and mitigate the cost, in profit loss and PR, that they would have to eat due to recalling the defective devices: Quickly rush to market a set of colorful Apple-endorsed iPhone cases that JUST cover the conductive surfaces of the phone. The backstory for the launching of the cases gains some credulity because Apple happened to have already launched a case for the iPad, so Steve could casually mention in the keynote that "We did it for the iPad. We thought we'd try our hand at it for the iPhone." Case manufacturing ramp-up time is likely MUCH faster than the time it takes to ramp up iPhone production, so they could quickly rush the cases to market. Give it a clever name, include it in the keynote, and a substantial number of customers are likely to buy the bumper and never notice that their bought-at-launch iPhones are defective.
For those customers who do experience a problem, replace their phone no questions asked. But those customers who return it are likely to be a small subset of the whole launch day purchaser population, saving Apple substantial amounts of money and, more importantly, PR problems. Never publicly admit there's a problem, maintain the launch date, and preserve Apple's "untarnished" image. After a month or so, the iPhones subjected to the revised manufacturing process would hit the market, people would start experiencing the problem in much lower quantities, and the problem would quickly fizzle away to nothing, only to be vaguely remembered in the annals of Apple product launch history.
I actually think it is a rather interesting and creative--if not completely responsible--way of handling the issue. And it seems to me to be the most likely theory of what's going on. I'll reserve further judgment until we see how this pans out. Until then, let us all watch with bated breath.
