Consumer Reports has tested the iPhone 4 in its lab and has duplicated the antenna problem so many are having. The problem has to do with signal quality degrading to the point of calls being dropped by the iPhone. The fix they found is to use duct tape or other nonconductive material to cover the spot on the lower left of the phone which causes problems.
Apple, for its part is going to roll out a software update which alters its calculation of antenna bars and they believe this will solve the problem. Millions trust Consumer Reports and it is tough to doubt their findings - especially since so many others have the same problem.
It seems to me at this point that Apple will be forced to shell out for free cases for all iPhone users or have a recall of some sort. The solution may be a combination of both of these as people like me do not want a plastic cover for my phone. This can't be a cheap solution - you have to figure $50-$100 per iPhone 4 sold depending on what Apple chooses to do.
It seems though the company may have a much more serious challenge on its hands than it is admitting to the public and especially its shareholders.