Apple (NASDAQ:AAPL) said the reception issues some iPhone 4 customers have been experiencing are due to a flawed formula the company uses to calculate the number of bars available for cellular service, and that it is working on a software fix to solve the issue. Apple, which has surged to prominence in the smartphone market on the strength of its iPhone devices, said it has been incorrectly calculating how it measures signal strength since the original iPhone, which was released in 2007.
The stunning admission by the historically aloof company comes after increasing pressure in recent days over problems related to the iPhone 4's antenna, which some users began detecting shortly after the phone went on sale June 24. Concerns center on the phone's antenna and the reception issues customers have experienced when holding the device a certain way. Some antenna experts have said that holding the device in a certain way can bridge the antennas in the stainless steel band that goes around the phone, which houses antennas for WiFi, Bluetooth, GPS and voice and data. Indeed, Both Apple and AT&T (NYSE:T) have been sued by iPhone 4 customers who allege the companies knowingly sold them a defective product.
Apple has sold more than 1.7 million iPhone 4s so far, and had previously responded to the antenna issue by recommending that customers hold the iPhone 4 in a different way or purchase a case for the device.
"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," Apple said in a statement, addressed as a letter to iPhone 4 users. "Our formula, in many instances, mistakenly displays 2 more bars than it should for a given signal strength. For example, we sometimes display 4 bars when we should be displaying as few as 2 bars. 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 we are erroneously displaying 4 or 5 bars. Their big drop in bars is because their high bars were never real in the first place."
To fix the issue, Apple said it is "adopting AT&T's recently recommended formula for calculating how many bars to display for a given signal strength" to more accurately display signal strength bars. The company is also making the bars taller so they will be easier to see. Apple said it will issue a free software update "within a few weeks" to correct the issue, which will be available to iPhone 4, 3GS and 3G users.
Apple representatives did not immediately respond to requests for comment about when the issue was detected and why it was not previously caught in testing. An AT&T spokeswoman, Jenny Bridges, declined to comment on Apple's statement, or when and how AT&T approached Apple about using a new formula to calculate bars.
In its statement, Apple did not admit any design flaw with its antenna for the iPhone 4. However, an independent analysis of the iPhone 4 by AnandTech found that when the iPhone 4 is "cupped tightly," covering an area in the lower left corner, there is a significant drop in signal strength.
"The fact of the matter is that either the most sensitive region of the antenna should have an insulative coating, or everyone should use a case," AnandTech wrote. "For a company that uses style heavily as a selling point, the latter isn't an option. And the former would require an unprecedented admission of fault on Apple's part."
In its statement, Apple said: "Gripping almost any mobile phone in certain ways will reduce its reception by 1 or more bars. This is true of iPhone 4, iPhone 3GS, as well as many Droid, Nokia and RIM phones."
The reaction of analysts was swift: "What Apple is saying now is that the customer never really had 4 bars of coverage when they were trying to complete those calls," BTIG analyst Walter Piecyk wrote in a blog post. "This is certainly the message that AT&T will be pushing in order to improve their reputation however it's a tough message to deliver as its also an admission that network coverage might not be as broad as users previously believed. We suspect Verizon's marketing department will have a field day with this one."
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