Apple is to give people who bought its iPhone4 a free case to address growing complaints about reception problems that have hurt the company's shares and image.

Chief Executive Steve Jobs announced the news at a rare media conference, when he admitted that Apple and the phone were "not perfect."

But he defiantly asserted that smartphone reception issues were a problem shared by the entire wireless industry, including devices by Apple competitors such as Research in Motion and HTC Corp.

Shares of Apple, which had fallen about 1 per cent in the morning, climbed 1.3 per cent after Jobs' comments.

"This has been blown so out of proportion, it's incredible," Jobs told an auditorium at Apple's Silicon Valley headquarters.

Jobs said that if iPhone4 users were still not satisfied, Apple will offer a full refund within a month.

Apple has sold well over 3 million units of the iPhone 4 in the three weeks since its launch.