I'm with AppleInsider on this one:
Jobs indicated that the new antenna design of iPhone 4, which leverages its peripheral stainless steel band, would also help to improve reception, and early reviews have noted that to be the case. Apple also told early reviewers that it had worked to optimize how the device selected nearby towers.
iPhone 4's hardware recall campaign
The flip side to these improvements appears to be that some early bugs have hit both how iOS 4 reports signal bars (its not very reliably accurate) and how it chooses the frequency it wants to use (its sometimes fails completely, indicating no service rather than switching correctly). This sort of thing can be fixed in the baseband software, and reports indicate that Apple is working to get out its first update as soon as this week. Every new iPhone so far got its first software update in about a month after its launch, so if those reports are correct, this could be the fastest first fix Apple has delivered.
That might be critical because iPhone 4 is facing its first "product recall campaign" much earlier than usual this year, too. Recall that every iPhone has been hit with a story that claimed a major hardware defect, and suggested that Apple would face a major and expensive hardware recall:
* The original iPhone was targeted by a Richard Windsor research note suggesting that iPhones might suddenly stopped working in the first three to six months due to a heat sensitive film failure in the screen, despite the fact that there wasn't any such film even present in its design.
* iPhone 3G was also targeted by a Richard Windsor research note, this time suggesting that iPhone hardware would fail because of the faulty design of its Infineon chips, a problem that supplier denied and which ultimately proved to be either just speculation or pure invention. Apple later released a software update that resolved many of the dropped call issues.
* iPhone 3GS was hit by widespread reports of overheating, then fears that faulty batteries would cause a recall. Neither problem panned out as a real issue, although Apple replaced batches of its mini power adapters after some plugs broke off.
The idea that iPhone 4 has a significant hardware defect because some users report being able to block their reception using their hand (when the phone is used without a case) hasn't yet been officially addressed by Apple. However, the overwhelming majority of reviews are reporting that iPhone 4 has significantly better reception and fewer dropped calls than previous iPhones. If the antenna design were really flawed, those improvements shouldn't be so widely observed.
Cell phone bars
The rumor campaign against iPhone 4's antenna has even infected the legitimate news media, with the UK's DailyMail printing an entire article (which was later pulled) worrying that "iPhone 4 may be recalled," based upon a comment posted to Twitter by a joke account purporting to be Steve Jobs.
Last week, the New York Times published a report based largely upon an article by Gizmodo, without noting the site's ongoing feud with Apple, including its being refused media entry to the WWDC keynote.
Brian Lam, the Gizmodo editor who lost his existing phone in a police investigation related to the iPhone prototype theft, said his site was "paying attention to the [iPhone 4] antenna issue because it could be a big deal," but also said he bought a new iPhone 4 and is now able to place "hours of calls" that he could not place in the same location with previous generations of iPhones.
At the heart of the issue is the fact that the cell phone signal bars reported by mobile phones do not function like a gas tank meter, as most users might assume. Instead, they work more like a reserve tank light. Five full bars can indicate anything from an ideal signal down to just enough to complete a call. As bars drop, the signal meter is reporting that call quality loss is imminent. The reason why some users see no difference (particularly when they're near a strong signal source, such as a Microcell 3G appliance) and others can drop from five bars to none just by covering the antenna with their hand placement, is that the latter group's five bars are indicating much less signal to start with.
So far, the reports of the iPhone 4's antenna issues have been based entirely upon unscientific testing by users who don't understand how their signal bars work. Comments by engineers Steve Gibson and Simon Byrnand explain that the signal bar meter does not quantify a specific amount of signal available (very different signal variations can still result in five bars being observed).
That means that videos posted by users that show a drop in signal related to hand placement are nearly worthless as evidence of a real problem. Users don't need bars to appear on their phone; they need a strong enough signal to place a call or send and receive data.
Gibson writes, "Apples '5-bars' cellular signal strength display is not showing the full range of possible, or even typical, received cellular signal strength. It is only showing the bottom end of the full range of possible reception strength."
No tests so far have shown that a hardware issue is to blame for reception problems on iPhone 4. In my own testing, I could not isolate any hand placement that prevented calls from working or lowered the reported data rates available, nor even could I force down the signal bars with a "death grip."
On the EDGE of a cliff
At the same time, there are still too many places I get service bars but can't maintain a good enough signal to make an actual call. There are many potential reasons for this, including the fact that one can get a strong mobile signal and still not be able to talk or send and receive data because the carrier's backhaul network is overcrowded. It's like being able to quickly jump on the freeway via an onramp with no traffic, only to be stuck in a jam that prevents you from actually getting anywhere further down the road.
Whether the problems I observed are related to iOS 4 software, an issue with AT&T's towers or their uplinks, or some combination of factors, it prevents iPhone 4 from being easy to unreservedly praise for the main purpose it serves. No matter how great the hardware, if the phone doesn't work as a phone where you need it to, it isn't a very good phone.
Of the first twenty calls I made with iPhone 4, every single one of them terminated itself prematurely except for one: a FaceTime call I made independent of AT&T's network. The experience was almost enough to make me return my fancy iPhone 4 and hold my nose through an Android experience on a lessor HTC phone with flashy hardware features that don't quite work and a terrible user interface on a high pixel resolution but low 16-bit color resolution screen, just so I could actually place calls (and do things like tether both my notebook and iPad, something I can't do with iPhone 4 unless I jailbreak it).
AT&T's network is clearly the weakest link for iPhone 4, almost in a dramatic Greek hero sort of fashion: the mythical magical mobile computer-phone dipped in the river Styx all but for its mobile contract. AT&T's issues create the perception that this amazing device can do no wrong, apart from when the Fates take circumstances out of the hands of Apple's own engineers and hand them to AT&T.
http://www.appleinsider.com/articles/10/06/28/iphone_4_review_2_the_phonefacetime.html