For the first time in recent years, Apple is facing a PR nightmare. They are receiving heavy criticism about the design of their new external antenna system on the iPhone 4. The issue is to do with increased attenuation when gripping or touching the iPhone 4's antenna in the lower left corner, which has been dubbed by the media as "antennagate". Reports are showing that this increased attenuation results in a loss of signal, which can cause dropped calls and data transfers to stall.

To smooth the situation Apple held a press conference on Friday 16th July, where they attempted to show that all phones suffer from the same issue and this is not a design flaw, but instead a design consideration. They went on to explain that due to the iPhone 4's revolutionary new antenna system, it actually receives better reception then any previous iPhone, however due to the antenna being externally facing, it is susceptible to increased attenuation when touched in certain areas. To backup this statement they showed videos of other popular phones (from RIM, Nokia, Motorola, Samsung and HTC) showing the same issue and gave the media a rare glimpse of their world class antenna testing facility to help prove they take antenna design very seriously. Finally they released an iOS update (v4.0.1) to re-work the signal bars and, more significantly, announced they would give every iPhone 4 customer a free "bumper" (official iPhone case), which were previously on sale for £25. This case reduces the attenuation issue by removing the users hand from the antenna.
So just how big is this issue? I have been an iPhone 4 owner since the launch and I can confirm that in low signal conditions, I can make my signal bars drop if I grip the lower left corner. However, in real world use I have never once dropped a call or seen any loss in performance. Therefore, at least for me, "antennagate" is a non-event and although I will happily take my free bumper from Apple, I will have no need for it in general use. If you are currently considering purchasing an iPhone 4 I would say don't worry about "antennagate" and feel safe that if you do experience issues, you can always return your iPhone 4 in the first 30 days for a full refund.
Unfortunately for Apple, it looks like this issue isn't going to go away anytime soon. The iPhone has been the number one smartphone for the past three years and the iPhone 4 has already sold over 3 million units in just 22 days. However it is this amazing success that is probably fueling the media - when you are already number one, a story of failure is far more exciting then a story of continued success. Personally, I will be very interested to see how this issue impacts sales and how Apple continues to handle the situation, as there is nothing more important to Apple then their brand image.
If you are interested to learn more about "antennagate" then I recommend checking out the article "The Emperor's New Antenna" by Watts Martin. In my opinion this is one of the best written articles about "antennagate" yet.