Upon investigation, we were stunned to find that the formula we use to calculate how many bars of signal strength to display is totally wrong. Our formula, in many instances, mistakenly displays 2 more bars than it should for a given signal strength. For example, we sometimes display 4 bars when we should be displaying as few as 2 bars. Users observing a drop of several bars when they grip their iPhone in a certain way are most likely in an area with very weak signal strength, but they don't know it because we are erroneously displaying 4 or 5 bars. Their big drop in bars is because their high bars were never real in the first place.
To fix this, we are adopting AT&T's recently recommended formula for calculating how many bars to display for a given signal strength. The real signal strength remains the same, but the iPhone's bars will report it far more accurately, providing users a much better indication of the reception they will get in a given area. We are also making bars 1, 2 and 3 a bit taller so they will be easier to see.
We will issue a free software update within a few weeks that incorporates the corrected formula. Since this mistake has been present since the original iPhone, this software update will also be available for the iPhone 3GS and iPhone 3G.
here's my thoughts:
Apple says they are adopting AT&T's "recently recommended" formula. I find it funny that it took three years and a design flaw to finally say we're listening to what AT&T says now... Apple and AT&T have been working to try to stop the dropped calls for quite a while now.
Which brings me to my next point. I think there is some truth in their statement about their "formula" for signal strength. I have a feeling apple and AT&T agreed to show more bars for less signal. Add in the design flaw and you have a big problem on your hands.
After 3 years apple was "stunned to find that the formula we use to calculate how many bars of signal strength to display is totally wrong."
If that's the case, hire me on and pay me the big bucks and I'll tell you that in the first five minutes.

avoiding admitting to the issue and blame shifting (saying AT&T just now released a "correct formula" to work with) always makes for some good stories down the road!

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