Customers who received the Apple iPhone 4 early have begun complaining that simply picking up the iPhone 4 and holding it can send the phone’s signal indicator plunging, by several bars. Gizmodo also assembled a number of reader responses that apparently confirmed the signal loss.The issue, according to industry executives, is that the iPhone 4 places its antenna on the outside of the case, where merely touching it can theoretically limit its ability to pick up a signal. “Antennas are very sensitive; that’s just a fact with all antennas,” said Michael Rogers, chief engineer at Wi-EX, a maker of cell-phone signal booster equipment, an industry which would stand to benefit from issues with the iPhone 4’s antenna.

A slight drop in signal, say from four bars to three, wouldn’t be enough to affect a cell-phone call or data coverage, Rogers said. But a sharp drop to a single bar of coverage could be enough to lose the signal altogether. Enough margin is built in with data coverage that users may not see a dramatic effect in an area with a strong signal. “But if you’re in a fringe area, anything like this means you’ll drop more calls,” Rogers said.

Even PCMag.com conducted experiment to check if it’s true for them, truly the iPhone 4 reception problem could indeed be replicated, with the so-called “death grip” – where the iPhone 4 was held with fingers touching the three antenna “lines” circling the device – causing the signal to drop.

They used Speedtest.net speed testing software to test with the phone sitting on a tabletop. If the phone was picked up the phone with a slightly sweaty hand and purposefully put one finger on each of the three “lines” around the edge of the device, with the corner tucked into the pad of the hand, the speed dropped dramatically and sometimes stalled out. Returning it to the tabletop caused things to speed up again. Adding one of Apple’s rubber “bumpers” to the phone negated the death grip, so it clearly has something to do with conductivity.

When the first iPhone came out, Apple placed the antenna in an obvious location, on the back of the device, Spencer Webb said, president of AntennaSys, an independent antenna consultant and designer for mobile and other products. If a user covered with a hand, the cell-phone signal dropped,  in a phone interview that he said was being conducted on the iPhone. “I’m talking to you now with a well-trained hand,” he said.

Webb said that he had recently designed a broadband GSM antenna, which he surrounded with an air gap to minimize interference from the GPS chip and other components, to increase performance. But the design of the iPhone 4 is so compact, and thin, that there wasn’t room to include any sort of an air gap, he said.The Apple iPhone 4 produces a maximum of 1.17 mW/g of SAR radiation at the ear, more than the iPhone 3GS and original iPhone, but less than the 3G, at 1.38 mW/g. Moving the antenna closer to the ear was “unfortunate,” Webb said. “And that’s the best I can say.”‘

Papool Chaudhari of Reyes Bartolomei Browne, a lawyer representing an inventor of a technology designed to minimize cell-phone radiation, went further. “I think Apple chose to sacrifice safety for better call reception,” Chaudhari said in a statement. “By placing the antenna outside the housing, Apple hopes to solve the dropped-calls problem, but at what cost?”

Webb said that he arrived at a choice between two conclusions: either the gaps in the band were not really involved with the antenna and the RF current, or that they were. “And if they are…that’s one’s of the dumbest things I’ve ever seen,” he said. “You can’t pick up the iPhone and not interfere with the antenna. It’s even harder to pick up the phone and not interfere with the antenna than the first-generation iPhone.”

This isn’t a deal breaker. In a reasonable world with reasonably good signal, you have decibels per milliwatt (dBm) to spare. But iPhone users have been frustrated with voice calling since the first iPhone came out. I personally don’t think circuit switched voice calls are Apple’s top design priority, and AT&T’s network has been overloaded by iPhone users practically since day one.

Steve Jobs likes to say he’s trying to make perfect products, and deep down in their emotional cores, Apple fans don’t understand why that doesn’t also include perfect RF reception and perfect network quality. Apple’s repeated “betrayals” of the enthusiast community by re-signing exclusivity deals with AT&T drive people to distraction.The iPhone 4 isn’t the perfect RF device. It has lots of strengths. Nothing, and no one, is actually perfect. And the death grip, really, is just a little reminder of the imperfections that keep our world interesting, challenging, and a world where there are many great mobile phones, not just one.

The phenomenon is similar to that of a person standing near an old-school television antenna. The water-filled human body affects the incoming signal, though in the television’s case the signal tends to be improved, Wired reports.On MacRumors, people have reported frequently dropped calls or poor cell reception on their new iPhones. But some reports suggest the latter problem may have more to do with how the signal is displayed on the phone rather than an actual reception flaw

Even Engadget contacted Apple and found out that if you cover the bottom-left corner of the phone and bridge the gap between the notch there with your naked flesh, you could see some signal degradation. Yes, you read that right: it’s not a software or production issue, simply a matter of the physical location of your hand in regards to the phone’s antenna. The company’s suggested fix? Move your hand position, or get a case which covers that part of the phone, thus breaking contact.

Here’s Apple’s official statement,

Gripping any 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 Phone 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

We know what you’re thinking, and we’re thinking it too: this sounds crazy. Essentially, Apple is saying that the problem is how you hold your phone, and that the solution is to change that habit, or buy one of their cases. Admittedly, this isn’t a problem that exists only for the iPhone 4 — we’ve seen reports of the same behavior on previous generations (the 3G and 3GS), and there is a running thread about this problem with the Nexus One. While it is definitely true that interference is an unavoidable problem, we can’t help feeling like this is really a bit of bad design. If the only answer is to move your hand, why didn’t Apple just move the antenna position?

Many have pointed out that utilizing one of Apple’s bumpers or a typical iPhone case fixes the issue. However, Apple CEO Steve Jobs has offered other advice to a few iPhone owners that  decided to email him about the problem saying,

Every phone has these areas of sensitivity, depending on the location of the antenna. Some phones even ship with labels warning customers to not cover certain areas with their hands

Check out the video of iPhone 3G having the same poor reception effect.