by David Gura

Since Apple released the iPhone 4 last week, many users have complained about poor reception.

In The New York Times on Thursday, Miguel Helft wrote about "a mystery of dropped calls."

In a long post on Gizmodo — which, as you may recall, obtained a prototype of the phone in April, Jason Chen compiled videos that show dramatic signal changes depending on how users hold the smartphone.

Last week, Apple released a statement about the problem:

Gripping any mobile phone will result in some attenuation of its antenna performance, with certain places being worse than others depending on the placement of the antennas. This is a fact of life for every wireless phone. If you ever experience this on your iPhone 4, avoid gripping it in the lower left corner in a way that covers both sides of the black strip in the metal band, or simply use one of many available cases.

This morning, in a letter to iPhone 4 Users, Apple said "we have discovered the cause of this dramatic drop in bars, and it is both simple and surprising."

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. 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.

In other words, the company says it isn't a hardware problem. It's a software glitch.  So, what's the solution?

To fix this, we are adopting AT&T’s recently recommended formula for calculating how many bars to display for a given signal strength. The real signal strength remains the same, but the iPhone’s bars will report it far more accurately, providing users a much better indication of the reception they will get in a given area. We are also making bars 1, 2 and 3 a bit taller so they will be easier to see.

There is skepticism in some corners. Wired says that their own tests and analysis from "antenna expert Richard Gaywood" proves "that holding the iPhone 4 with a bare hand significantly degrades data throughput."  And Ron Miller, writing for DaniWeb.com, says Apple's explanation "borders on surreal."

So far, it doesn't seem sales of the new iPhone have been affected. Earlier this week, Apple announced it had sold more than 1.7 million of them.