I can’t ever remember a time that Apple has ever taken such a brutal PR beating when Apple has been nearly immune to criticism in the past.  The usual baby treatment from the press may have gotten Apple in trouble this time because the antenna issue seems to have been the straw that broke the camel’s back for everyone but the most ardent Apple fanatic.

This fiasco is both unfortunate and ironic for Apple given that the iPhone 4 truly is the most advanced smartphone in the world.  It really does have the best smartphone display based on Anandtech’s field tests (even if it’s grossly exaggerated) and the new phone really does have much better radio sensitivity and low-signal performance than the older iPhones.  The problem is that the antenna problems are real whenever users touch the lower left corner of the phone.

Our own tests showed that the iPhone 4 will drop from 1200 Kbps to 3 Kbps.  Anandtech’s tests showed (depending how hard you grip the phone) that the iPhone 4 will lose between 19.8 to 24.6 dBm of signal strength.  In Apple’s letter today, Apple made no mention of the signal loss issue and blamed the problem on incorrect signal display saying that they got it “totally wrong”.  While the bar indicator may indeed be wrong, it doesn’t address the actual signal loss issue when holding the phone naturally the way Steve Jobs himself demoed it and the way all the actors hold it in Apple’s advertising.

So I have a prediction I’m going to make right now when Apple releases this software update.  Reviewers will notice that the signal strength bars will drop from 2 to 1 instead of 4 to 1 but they’ll still see the same severe drop in signal level and actual performance.  Once that happens, it will simply stretch this nightmare on even longer and the trial lawyers sharks will be circling the waters suing everyone in sight including the network operator and maybe even the people who own trees that obstruct wireless signals.

The simple solution would be to give away the bumpers to people who can’t avoid touching that part of the phone, but Apple seems to have already shot this option down.  The more long term solution would be to coat the antenna with a nonconductive material and appease the current user base with something else.  What is becoming clear is that Apple’s current Baghdad Bob strategy of blatant denial clearly doesn’t seem to be working.

UPDATE 9:22AM – John Grubber tried to do a translation of Apple’s letter, but he made one major error.  Grubber stated “Yes, with no case on the phone, your signal strength can drop by about 20 or even 30 percent depending how you hold the phone”.  Well that’s not correct at all because Grubber is conflating dBm with percentages.  The 24.6 dBm drop in signal strength measured by Anandtech correlates to roughly an 87% drop in signal strength, or 7/8th of the signal gets lost.

UPDATE 3:13PM – ComputerWorld reports that Apple will be ditching the 10% return fee.  Maybe it’s not my place to tell Apple how to run their business, but that seems like an awful way to do business.  Why encourage users to return their iPhone and give up that much profit along with the 10% fee when it would cost almost nothing to just give away the bumpers?  This is like Apple saying “we double dog dare you to return that phone” when they know that most users probably won’t.  It’s not going to make for a happy customer.