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Your bars are wrong.
Nope, they seem to be pretty damn accurate.
Actually they aren't. Apple just admitted that their signal display is "totally wrong". So while I do hope you have zero problems with your phone just know Apple is releasing a software fix to display accurate signal strength. They implemented a software fix in fall 2008 which in retrospect we now realize was the start of their false signal representation.
So is this a hardware issue or a software issue?
From my experience so far with the phone, it has been pretty accurate.
From my experience so far with the phone, it has been pretty accurate. Maybe most iPhone 4 users have signal strength representation issues, but I don't. My post was only a reflection of my experiences, thus YMMV.
Not really, they just need to give bumpers away for free.
Giving early adopters free bumpers is absolutely not a solution. You can't just hand a consumer a case for their new phone and expect they will be okay with this. For starters a lot of consumers don't want to place a piece of rubber around their beautiful new phone. And more importantly handing out bumpers means Apple is admitting their initial product was flawed to begin with. So if that was the case they'd also be forced to swap your phone for a new one if you refuse the new bumper.
Wait, so how do bumper fix the issue? I thought the reception issue was on the lower back side of the iphone?
My guess is the bumper acts as an insulator between the sides of the phone and your hand.