Apple has announced that the iPhone 4 antenna issue is software related.
In a letter addressed to iPhone 4 users, Apple has explained that the algorithm used by the company to display signal bars was wrong, and has been since the release of the first iPhone.
The company said that it would be releasing a free software update to fix the issue.
Apple said: "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."
The formula used by Apple display two signal bars more than it actually should, meaning that if users are in a low reception area, instead of display one or two bars, the phone will display three or four bars.
Apple maintained that the iPhone 4 antenna was not at fault and users must have been in a low-reception area when they experienced call drops.
The company also clarified that gripping any smartphone tightly will reduce its reception by one or two bars.
The company added: “At the same time, we continue to read articles and receive hundreds of emails from users saying that iPhone 4 reception is better than the iPhone 3GS. They are delighted. This matches our own experience and testing.”