IPhone signal bar fix shows AT&T's weak spots

(CNNMoney.com) -- Two weeks ago, Apple promised it would soon issue a fix for the "totally wrong" software formula it has been using for three years to display the iPhone's signal strength. Apple on Thursday released the iOS 4.0.1 update with a fix for the bug. We immediately dove in.

Apple has dramatically changed the signal strength to signal bar mapping in the new software, making the dynamic range not only much broader, but the range values for each bar much wider. The range of signals that correspond to bars three and four are the same width, and bar two is only slightly less.

The cutoff value for dropping from two bars to one bar remains the same, but every other value has increased. That's an important adjustment: In our initial investigation of the iPhone 4 antenna, we recorded a worst-case signal drop of around 24 decibels when the iPhone 4 is held tightly in the left hand -- more than on the iPhone 3GS or competing phones like the Nexus One. We concluded that that the effects of the signal drop were exacerbated in part by the way the iPhone visualizes signal strength. Its dynamic range is compressed so much that the 24 dB drop from the so-called "death grip" could make all the bars go away.

But with the new software, if you have five bars on your screen, the worst-case drop of 24 dBm no longer makes all the signal bars disappear. It instead drops down to two bars. Apple's mappings have gone from having probably the most-compressed dynamic range among handset vendors to less compressed than Android.

In other words, Apple's signal strength reporting is now far more honest.

While the software update obviously does not and cannot address the design of the antenna itself -- or make the signal drop from holding the phone any less -- it does change the way the issue is perceived. Most iPhone users will see fewer bars disappear when they hold the iPhone 4 in a bare hand. The side effect is that the iPhone now displays fewer bars in most places, and users will in time see the -- perhaps a bit shocking -- reality of signal strength in locations previously denoted as having excellent service. Apple (AAPL, Fortune 500) is simply going to stop covering for AT&T's (T, Fortune 500) network.

Apple has also, as promised, changed the heights of bars 1, 2, and 3. They're taller, and the result is that the relative heights are no longer linear, but rather a tad exponential looking. It's a mind trick that Apple no doubt hopes will make the signal look better. If the bars are taller, they must denote stronger signal, right?

The reality is that Apple likely wants to deflect at least some of the initial backlash AT&T will face for reporting the signal bars without any concessions. Regardless of how tall the bars are, there are still going to be fewer of them virtually everywhere. Interestingly enough, while bars 1 and 2 are the most changed visually, their respective cutoffs are virtually unchanged.

While we were testing iOS 4.0.1, we concluded the signal-reporting lie that started with the iPhone 3G had been removed entirely. With this new software, users looking at signal bars will get a much more realistic view of how signal is changing.

We tested iOS 4.0.1 on iPhone 3GSes as well, and found the mappings to be the same there as well.

Our original assessment still stands: Apple should provide free bumpers to iPhone 4 customers. Nickel-and-diming is never the way to maintain a loyal customer base. Introducing a non-conductive antenna band and replacing existing phones in the market also makes a lot of sense, assuming Apple has found a way to do that.

Apple will hold a press conference on Friday to talk about the iPhone 4. In a little more than 24 hours, we'll find out how Apple views the situation and what it plans to do about it.

Brian Klug and Anand Lal Shimpi write for AnandTech, where a version of this review first appeared.