By now most everyone has heard about the iPhone 4 antenna problems. Holding it in certain areas can either bridge the gap between two of the antennas embedded into the outside frame causing them to not work properly or covering the lower part of the phone can attenuate the signal resulting in poor reception. There is no software that can fix this physical problem although Apple was pushing this as a solution by reprogramming the sensitivity of the signal strength indicator (number of bars displayed).
There were numerous complaints and now there are lawsuits against Apple that they shipped a defective product and mis-represented its performance (by the way, there are many reports that they are hiring antenna engineers if you want a job there). The final nail seemed to come last Monday when Consumers Reports reported they are not recommending the iPhone 4 due to its issues.
The $30 bumper Apple sells can fix most of the issues but they earlier insisted that customers pay for one. There are even YouTube videos showing how to fix the problem with a band-aid which people are now selling! After being in denial for many weeks and trying to divert attention to the real antenna hardware problem, Apple seems to have come to their senses and is now going to give away free bumpers to its customers although they still are not admitting it is a design flaw. This is estimated to cost around $175 million but this is probably much less than a recall or all the lawsuits, etc. that will be filed in the future.
It is a shame as the new iPhone has improved sensitivity and works very well when held so that the antenna is not covered or shorted out. I originally thought this new antenna design was a great idea but leaving it exposed has shown to be a very bad idea. The iPhone 4 antenna in the phone frame is really a poor design and should have been caught/fixed during modeling or at least during testing. It is standard practice to test a phone in several different hand positions next to a phantom head so it is hard to believe they did not know about this flaw.