Consumer Reports Flunks Apple's iPhone 4

CUPERTINO, Calif. — Apple's iPhone 4 could see a slowdown of sales after Consumer Reports ripped the new smartphone, claiming it can't recommend it because of the device's antenna issues.

Consumer Reports said its engineers confirmed that an internal circuitry flaw is creating a reception problem in areas that don't have strong signals.

Michael Gikas, senior electronics editor at Consumer Reports, said that engineers performed a series of tests on three separate iPhone 4s inside a controlled lab environment known as a “radio frequency isolation chamber.”

The engineers found that when the bottom left corner of the iPhone was touched, it could sometimes lose enough signal strength to drop calls.

Consumer Reports also questioned Apple’s integrity on the antenna issues.

Our findings call into question the recent claim by Apple that the iPhone 4’s signal-strength issues were largely an optical illusion caused by faulty software that 'mistakenly displays two more bars than it should for a given signal strength,' " Consumer Reports said. "The tests also indicate that AT&T’s network might not be the primary suspect in the iPhone 4’s much-reported signal woes."

Apple released a statement earlier this month, claiming that it had looked into the signal problems and was “stunned to find that the formula we use to calculate how many bars of signal strength to display is totally wrong.”

Apple also said it would release a software patch to fix the issue and would make “bars 1, 2 and 3 a bit taller so they will be easier to see” on the phone’s signal display.

But Apple at the time wouldn't place blame with the phone’s hardware.

Gikas said that he doesn't believe consumers should pay extra money to fix the problem.

“We think either Apple should supply free cases for the phone or come up with another solution," Gikas said. "That’s why we are not recommending the iPhone 4.”

It's the second piece of bad news delivered to Apple in recent weeks.

A federal judge has consolidated several related lawsuits relative to Apple's exclusive iPhone partnership with AT&T. The judge in California granted plaintiffs class-action status, giving legal merit to a monopoly claim against the two companies.

For the past three years, the iPhone has been sold only on AT&T's network in the U.S. The exclusive deal is reported to last another two years.

The suit, filed last week, contends that iPhone customers who signed a two-year agreement with AT&T were in effect locked into a five-year contract with AT&T, because of the exclusive deal between the two companies.