Take this for what you want, but I wouldn't take the time to post this if it wasn't true. I have no way to prove it to you but anyways... I have had the proximity issue since day 1 (June 24). I got the iPhone 4 at my local Apple Store and I experienced issues with it from the get go with the proximity sensor. When I got the phone I did not restore from backup, I set it up as a new phone. By 3rd day I had gotten fed up with the proximity issue, and I called AppleCare and told them about it. I got my first iPhone 4 exchanged after 2 trips to the Apple Store (first guy told me that it was in a different location and that I probably was holding it wrong. I left and knew I would come back the next day and hope for a different genius). Anyways, I went back the next day got a new genius and told him the problems and he said he heard of it and gave me a new iPhone 4. I thought this would solve all my problems. Nope, the iPhone I currently have is worse than the first I had. I cannot make a call without having my face interfere with the call. For the past few days all my calls I make have been on speaker phone. Now to fast track today, I called AppleCare again because I was just fed up with it and hoping the software update coming out for the antenna would fix it. (This is when I assumed it was software related). Anyways, the first lady I spoke to was nice and great and she understood the problem, and then upgraded my called to Tier 2 Tech Support. There I spoke to a another lady who said she was familiar with the problem, and I asked her bluntly, is this a software or hardware issue. She flat out told me it was a HARDWARE ISSUE. I asked if Apple was going to make a statement about it, and she told me probably not. Anyways, I now have another genius appointment to replace this iPhone tomorrow, and I asked what if this iPhone has the same problem. She said if that's the case then give me a call and I will send you another iPhone 4 straight from the FACTORY. She said that they would specifically get an iPhone 4 straight off the factory line for me, and make sure it doesn't have a bad proximity sensor in it. Believe it if you want, this is just what I was told. I feel like a huge batch of the first iPhone 4 were given faulty proximity sensors. My first iPhone 4 was built in week 24, and this one was built in week 26 so the bad batch has to fall somewhere in there. Sorry it's so long.