Ouch. This is a shocker. Consumer Reports just finished their testing of the iPhone 4. They've come to the conclusion that the phone's now legendary reception issues are hardware related and not the result of a software bug, as Apple had claimed.
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CR tested several new iPhones in a radio frequency isolation chamber with a cell tower emulator. They were able to confirm that the iPhone 4 can lose signal entirely when touched in one specific area. Several other AT&T phones, including the 3GS, were tested and found to not possess the same issue.
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As a result of this issue, Consumer Reports does not recommend buying the iPhone 4. They did find a solution to the problem. If you cover the antenna gap with duct tape or some other non-conductive material it fixes the issue. A case is expected to work in the same way.