Can't believe no one has posted this yet!
http://www.apple.com/pr/library/2010/07/02appleletter.html
PCWorld» Phones
Apple Admits iPhone 4 Reception Woes Are Hardware-Related
Apple's software update would only make iPhone 4's signal meter more accurate, but would do nothing to fix the hardware problem.
Ed Oswald, Technologizer
Jul 7, 2010 4:46 pm
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Its been like pulling teeth, and it took journalists mailing AppleCare rather than Apples notoriously tight-lipped and selectively-responding public relations department, but we have our answer. That iPhone 4 software update will do nothing to fix the reception problemsit is a hardware issue.
Gizmodo e-mailed AppleCare support three times this week and got the same answer every time, which means that Apple has changed their tone ever so slightly. AppleCare representatives confirmed an antenna interference issue when the phone is held near that infamous lower left-hand corner. The software update would only make iPhone 4′s signal meter more accurate, and not fix the problem.
In other words, now youll really get an idea of how much this issue is killing your reception.
Apple is telling its customers as it has in its most recent public statement to not hold the phone in a manner that causes the hand to touch that lower left hand corner, or purchase a $30 bumper from Apple which would solve the problem (a case from any manufacturer would, too).
Neowins Brad Sams has an obviously Microsoft-centric take on the issue, but its definitely true: Apples iPhone 4 problem is beginning to look a lot like Xbox 360′s Red Ring of Death Issue. Microsoft attempted to sweep the issue under the rug, but waseventually forced to take action just based on the sheer scope of it.
It could be argued that Apple is getting close to this point, and thats why were beginning to see a change in its tone. I do agree that if customers are having enough of an issue with the phone that Apple should be providing these bumpers at no cost. It wasnt the consumers fault that designers decided to make the antenna out of bare metal that surrounded the case.
Either way, it doesnt look like this issue will be going away anytime soon. I highly doubt Apple would change the design of the phone in midstream, so well probably be waiting until iPhone 5 for a true fix.