Apple Responds to IPhone Complaints With Signal Software Fix

Apple Inc., following complaints about reception problems with its iPhone 4, discovered a software problem that has displayed inaccurately high signal strength since the original device was introduced in 2007.

Some iPhones have been showing more bars of signal strength than merited, leading users to believe they had better reception. A software update to fix the problem on its 3G, 3GS and 4 models will be released “within a few weeks,” Apple said today in a statement.

“We were stunned to find that the formula we use to calculate how many bars of signal strength to display is totally wrong,” Cupertino, California-based Apple said. After the fix, “the real signal strength remains the same, but the iPhone’s bars will report it far more accurately.”

Customers have complained about poor reception from the network of AT&T Inc., the iPhone’s exclusive U.S. carrier, since it debuted three years ago.

“This is really surprising that something as simple as this is what is causing the problem and that it’s been around for so long,” said Francis Sideco, an analyst at iSuppli Corp. in El Segundo, California, which analyzes the engineering of wireless devices.

Apple fell $1.54 to $246.94 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have gained 17 percent this year.

IPhone Antenna

The iPhone is Apple’s top-selling product, accounting for 40 percent of its revenue last quarter. The company sold 1.7 million of the devices in its first three days on sale.

Verizon Wireless, the largest U.S. mobile-phone carrier, is set to begin sales of the iPhone in the U.S. in January, two people with knowledge of the plan said this week.

Apple said some users reported they lost four or five bars of signal strength when they held the iPhone in a certain way, a bigger drop than normal. The company has suggested customers hold the phone differently or use a case.

Apple’s rivals have been trying to take advantage of the antenna problem. Motorola Inc. released an ad highlighting that its new Droid X phone has a double antenna design, “the kind that allows you to hold the phone any way you like and use it just about anywhere to make crystal clear calls.”

Apple also has been sued for the reception problem by two users who accuse the company of unfair business practices and false and misleading advertising.

With the software fix, Apple said it’s adopting AT&T’s recommended formula to more accurately calculate how many bars to display. The change will result in the first three bars being easier to see, Apple said.

Reception Problems

Complaints about the reliability of AT&T’s network will probably persist, said Tavis McCourt, an analyst at Morgan Keegan & Co. in Nashville, Tennessee.

“It’s a software fix, but it doesn’t really seem to address the reception problems the iPhone has had,” McCourt said today in an interview. Given the sales, “consumers seem to be willing to forgive the iPhone for any reception problems for the experience of using it,” he said.

To contact the reporters on this story: Greg Bensinger in New York at gbensinger1@bloomberg.net; Adam Satariano in San Francisco at asatariano1@bloomberg.net.

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