Apple may attempt to alleviate what iPhone 3G users have perceived to be connectivity problems by way of a software update instead of a recall, which would take a significant chunk from its profits.
Earlier in the week, Swedish engineering magazine Ny Teknik reported on tests from unnamed iPhone 3G users showing its signal sensitivity was well below levels specified in 3G standards. That report indicated that there may be a hardware issue somewhere between the antenna and the amplifier. If either or both parts aren't operating properly, it could lead to poor connectivity and slower speeds.
Apple's support forums have seen a significant number of complaints including a higher than normal amount of dropped calls, as well as few or no "bars" indicating a very poor signal. Anecdotal tests show that other 3G devices in the same location had a better signal reception and were not experiencing the same problems. The iPhone's connectivity issues aren't localized to the US and AT&T either: Similar problems were reported in Canada, Japan, Great Britain, and elsewhere.
Nomura financial analyst Richard Windsor surmised that these problems could be caused by what he termed an "immature" chipset produced by Infineon. BusinessWeek lent weight to that theory on Thursday, citing two sources as saying the Infineon chip was indeed to blame, but that the issue could be addressed by the iPhone 2.1 software update.
But iSuppli analyst Francis Sideco added that there could be an issue with the radio frequency transceiver or baseband, which would mean that update would need to be bigger. In all cases, neither Apple nor its partners are acknowledging any specific problems.
According to BusinessWeek's sources, the Infineon chip was programmed by Apple to generate a higher quality 3G signal than was actually required. Thus, if a signal was not as strong in a particular area, the phone would revert back to the slower GPRS and EDGE networks.
Why Apple may have done this is something that was not explained. Perhaps Apple may have wanted to provide the best 3G experience possible, and felt that allowing the phone to attempt to connect to 3G towers in fringe areas may have not been a good solution.
Several news sources report that the 2.1 update may be less than a month away.
