Consumer Reports Says Apple IPhone 4 Has `Significant' Flaw

Consumer Reports said it isn’t recommending Apple Inc.’s iPhone 4 following tests confirming the handset has a hardware flaw that causes signal quality to degrade.

“The problem seems to be a design flaw, and it is significant,” Mike Gikas, senior electronics editor for Consumer Reports, said today in an interview. The publication has recommended the three previous iPhone models.

Tests were conducted in a room designed to eliminate radio- frequency interference, he said. The results showed that when a user covers the phone’s lower-left side, where two parts of the external antenna meet, the loss of signal strength may lead to dropped calls in areas where AT&T Inc.’s coverage is weak. The tests suggest AT&T’s network, often criticized for spotty iPhone coverage, isn’t responsible for the signal problems.

AT&T is the iPhone’s exclusive carrier in the U.S. Apple says the problem is software-related and involves how the phone displays signal strength. A fix will be released, the company said on July 2.

“If the signal is strong in the area, then you won’t lose the call,” Gikas said. Consumer Reports is published by the nonprofit Consumers Union, based in Yonkers, New York.

Natalie Kerris, a spokeswoman for Cupertino, California- based Apple, didn’t immediately return phone and e-mail messages seeking comment. Mark Siegel, a spokesman for AT&T in Dallas, had no comment.

More Phones Tested

Consumer Reports also tested other phones, including Apple’s older iPhone 3GS, and the Palm Pre, and found they didn’t suffer from the same problems as the iPhone 4, Gikas said.

Gikas suggested that users who experience the problem apply duct tape, which doesn’t conduct electricity, to the gap in order to reduce the chance of causing signal interference.

Apple has faced criticism since the phone went on sale June 24, with consumers complaining about losses of signal strength when holding the phone along its left-side black stripe.

Apple fell $2.34 to $257.29 at 4 p.m. New York time on the Nasdaq Stock Market. The shares have gained 22 percent this year.

To contact the reporter on this story: Arik Hesseldahl in New York at ahesseldahl@bloomberg.net

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