It has been almost two weeks since a Nomura analyst reported the dropped phone calls due to faulty chips were a significant problem for Apple (NASDAQ: AAPL) 3G iPhone customers.

The mainstream press has been slow in reporting the trouble, but the FT made it a major story today. According to the paper, "Over the past few weeks, customers have flocked to Apple's online support forums to complain about weak or fluctuating signals leading to dropped calls and long download times."

Since the FT prides itself on being early to market with important news, what happened?

The media, in general, seems reluctant to take on Apple's image as an almost flawless designer, manufacturer, and marketer of PCs and consumer electronics devices. The company's customers are vocal defenders of the Apple's blue chip reputation and are rabid about attacking media that try to undermine that.

Apple's obsessive need to present itself as "perfect" is beginning to backfire because of problems with its newest product, the 3G iPhone. It would be better to come clean about the troubles and offer a way to fix them

Douglas A. McIntyre is an editor at 247wallst.com.

Apple Inc. (NASDAQ: AAPL)'s new 3G iPhone will hit store shelves on July 11 for a breakout new price of $199. Figuring that this new version is quite a bit more enhanced than the existing version -- but is going to sell for half the price -- who is losing out here? Nobody. It's Apple's way of hitting a new price point by agreeing not to take a monthly cut of revenue from every AT&T Inc. (NYSE: T) subscriber who uses the iPhone. Where's the cash flow part for Apple in the agreement then?

One theory is that AT&T is paying Apple $325 in cash for every 3G iPhone that will be sold soon. To help ward off phone unlockers and other potential miscreants, the new iPhone will have to be purchased and activated in an AT&T or Apple store, in person. This will probably eliminate almost all of the "buy here, use on another carrier" mentality that many non-AT&T folks would love to accomplish. It also preserves revenue for both companies by tight-fisting consumer control over where they use the device they just purchased.

MAJOR PAPERS:

• The Wall Street Journal reported that executives from Ford Motor Company (NYSE: F) informed plant managers and union representatives that they intend to reduce overtime and that additional buyouts of union workers were necessary to cut costs.
• The Wall Street Journal also reported that federal prosecutors are preparing to file criminal charges against Ralph Cioffi and Matthew Tannin, two hedge fund managers at Bear Stearns, now part of JP Morgan Chase & Co (NYSE: JPM), with securities fraud.
• Investors who helped U.S. financial companies raise capital are currently losing nearly $10B on paper, according to an analysis by the Financial Times.

OTHER PAPERS:

• Fortune reported that the materials used to build Apple Inc's (NASDAQ: AAPL) new 3G iPhone could cost as little as $100, while the components of the old iPhone cost $170, according to analysis by Portelligent, an Austin, Texas-based teardown specialist.
• Steve Jobs appeared to be extremely thin during the unveiling of Apple's new iPhone last Monday, causing speculation by observers. Fortune speculated that Jobs' weight loss over the years is being caused by a complex operation he underwent in 2004, in order to treat a rare type of pancreatic cancer.

So what happened?

For months now that investors and Apple Inc. (NASDAQ: AAPL) enthusiasts have been expecting the 3G iPhone. The past few weeks, there was so much hype that speculation over features, dates and even a new business model surfaced daily, from bloggers, reporters, investors and analysts.

Finally the day came and Steve Jobs announced a 3G iPhone for $199 to be released on July 11 in 22 countries at first with the intention of selling the iPhone in 70 countries. Not only that, but the new model includes a GPS and push email.

Imagine getting a free version of the new Apple (NASDAQ: AAPL) 3G iPhone if you spend enough money on your cellular plan.

According to the Telegraph, O2, the iPhone distributor in the UK, will do just that. The paper writes that the firm with the exclusive rights to the product in Britain "is set to give away the 3G version of the handset to its highest-spending customers when it launches here next month."

The idea makes a perverse kind of sense. Cellular providers will have to pay Apple about $400 for the handset, unless they are passing that costs on to their subscribers. If a customer has a large enough plan, say $200 each month for a year, it may make sense for O2 to give that customer an iPhone to stay around.

Maybe AT&T (NYSE: T) will do the same in the U.S.

Douglas A. McIntyre is an editor at 247wallst.com.

MAJOR PAPERS:

• In part two of a series to help explain the reasons why The Bear Stearns Companies Inc (NYSE: BSC) collapsed, the Wall Street Journal said that executives believed they were about to turn a corner, but fear and rumors sent lenders, trading partners and clients running.
• The Wall Street Journal also reported that a host of factors could derail InBev NV from bidding for Anheuser-Busch Companies Inc (NYSE: BUD), including the cultural differences between the two, protests by politicians over foreign ownership of a U.S. company during an election year and possible unrest from Anheuser distributors and employees.
• Following the recent indictment of one of the bank's former senior executives, the Financial Times reported that UBS AG (NYSE: UBS) told members of its former private banking team not to travel to America. The restrictions suggest UBS is concerned investigations by the SEC may widen.

WEB SITES:

• The latest set of photos that supposedly show parts of Apple Inc's (NASDAQ: AAPL) 3G iPhone, released by Dutch website iPhoneclub.nl, look identical to the previously released pictures that were supposedly photos of the 3G iPhone, Engadget reported.

Apple Inc. (NASDAQ: AAPL) is trading at $173.15 at 10 am, up a bit more than 1%.

Steve Jobs is expected to introduce the Apple 3G iPhone with pricing in early 2008, and AAPL is expected to report EPS in mid-January. Macworld will be held January 14-18 in San Francisco.

AAPL January and February option implied volatility of 68 is above its 26-week average of 48 according to Track Data, suggesting larger risk.

Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Apple (NASDAQ: AAPL) closed at $191.81 Thursday.

Steve Jobs is expected to introduce the Apple 3G iPhone with pricing in early 2008. Macworld will be held January 14-18 in San Francisco. International CES will be held January 7-10 in Las Vegas. AAPL is expected to report EPS in mid-January. AAPL December 190 straddle is prices at $9. AAPL January option implied volatility of 50 is above its 26-week average of 45 according to Track Data, suggesting larger price risk.

Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

The head of AT&T (NYSE: T) is saying that Apple (NASDAQ: AAPL) will launch a 3G iPhone next year and the big phone company is anxious to start selling it. Barron's quotes AT&T's CEO as saying, "The 3G iPhone, when? You will have it next year."

Although the iPhone has sold extraordinarily well in the U.S., one of its only drawbacks is that it runs on AT&T's 2.5G network. The phone does not have the capacity to run on the company's faster 3G network, but the handset is obviously being adapted.

An iPhone on a faster network is likely to encourage people to use the phone more for web surfing and data downloads. AT&T makes money off of usage fees, so this should increase its revenue from iPhone customers. It is widely assumed that Apple gets a piece of these usage fees, so its income-per-phone could go up as well.

Customers waiting for a 3G version of the phone will probably flood AT&T stores when the new version hits the market. It could look like the original launch all over again.

Douglas A. McIntyre is a partner at 247wallst.com.