Apple calls the release of its iPhone 4 the most successful product launch in the company’s history, moving 1.7 million units in its first three days. But users quickly encountered reception problems whenever they held the phone a certain way, due to its external antenna design.

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“Gripping almost any mobile phone in certain ways will reduce its reception by one or more bars. This is true of iPhone 4, iPhone 3GS, as well as many Droid, Nokia, and RIM phones. But some users have reported that iPhone 4 can drop four or five bars when tightly held in a way which covers the black strip in the lower left corner of the metal band,” Apple said though spokespeople Natalie Harrison and Steve Dowling.

“Upon investigation, we were stunned to find that the formula we use to calculate how many bars of signal strength to display is totally wrong. Our formula, in many instances, mistakenly displays two more bars than it should for a given signal strength. For example, we sometimes display four bars when we should be displaying as few as two bars,” the spokespeople said. 

“Users observing a drop of several bars when they grip their iPhone in a certain way are most likely in an area with very weak signal strength, but they don’t know it because their high bars were never real in the first place. To fix this, we are adopting AT&T’s recently recommended formula for calculating how many bars to display for a given signal strength,” they added.

Apple plans on fixing the problem by adopting AT&T’s recently recommended formula for calculating how many bars are displayed to indicate signal strength. While the signal strength will remain the same, the iPhone’s bars will report it more accurately and give users a much better indication of the reception that they will get in a given area, according to Apple. The company also will make bars one, two, and three taller so they will be easier to see.

Within a few weeks, Apple will issue a free software update incorporating the corrected formula. The update also will be available for the iPhone 3GS and 3G. Users who aren’t satisfied can return undamaged iPhone 4s to any Apple retail store or the online Apple Store within 30 days of purchase for a full refund.

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