According to Bloomberg, one of Apple's senior engineers raised concerns a year ago over the potential for the iPhone 4's design to cause dropped calls.

As promised, the new iPhone system update corrects the bar signal display. Also as promised, it provides another "enhancement": Taller signal bars! Free tip: If you paint flames on the back of your iPhone 4, it runs 2.3x faster.

Initial reports on Apple's iOS 4.1 update confirm what we already knew and what AppleCare is telling to customers: The iPhone software update doesn't fix the iPhone 4's antenna problems. The good news is that it fixes the bar display.

Yesterday, a reader claimed that—after exchanging his iPhone 4—he couldn't reproduce the sharp signal drop caused by the antenna problem. Now, some readers have confirmed the story. However, others haven't seen any improvement in their replacement units. [Updating]

We've received only one report, so take it with a hill of salt: A Gizmodo reader claims that, after Apple replaced his iPhone 4, he couldn't reproduce the sharp loss of signal. He says that the hardware seems slightly different:

Apple has deleted at least six threads talking about Consumer Reports' iPhone 4 tests. Customers on Apple's support boards were discussing the publication's negative report, which demonstrated that the design flaw could affect all users. [Updated]

AppleCare has confirmed what we already knew: The incoming software update won't fix the iPhone 4's transmission and reception problems. They acknowledged the antenna problem exists, offering the same solution as before: Buy a case or hold the iPhone differently.

This graphic shows why some people experience the iPhone 4 signal drop problems while others haven't been able to reproduce it. It also explains why Apple's incoming software update—which promises more accurate signal bars—won't fix the antenna problem.

A BGR reader wrote an angry email to an engineer and Steve Jobs about the iPhone 4's antenna problem. Surprisingly, Jobs replied. And even while countless tests show voice and data problems, Jobs dismisses it all as "rumors". Updated

The first iPhone 4 class action suit against Apple and AT&T has been filed today in the United States District Court for the District of Maryland. The lawsuit focus on the antenna design problems, making several claims: Updated

Richard Gaywood—Ph.D in wireless network planning from Cardiff University—has tested the iPhone 4 communications problem. Before, he thought there were no problems. Now, his conclusion is clear: "The iPhone 4 is a fantastic device but a lousy phone."

Apple acknowledges the iPhone 4's reception problems. Their solution: Hold it differently or buy a case. But if this is an Apple design problem, they should fix it for real or give out cases for free.