By Philip Elmer-DeWitt
June 28, 2010

Reports of the demise of Apple’s newest device have been greatly exaggerated

The problem surfaced first in Engadget, a U.S.-based gadget site, early Thursday morning, less than an hour after Apple (AAPL) launched the iPhone 4 in North America.

By Sunday, the London Daily Mail was quoting Steve Jobs to the effect that the entire shipment might have to be recalled — a report that was scrubbed from the paper’s website when the editors discovered that its only source was a Twitter message that was clearly not written by Steve Jobs.

The issue, if there are any readers who have not yet heard, is the iPhone 4’s tendency to lose signal strength when held in the so-called “Death Grip” — with the gap between two sections of its novel external antenna array covered by the left hand.

“Non issue,” the real Steve Jobs e-mailed one customer on Thursday. “Just avoid holding it that way.”

By Sunday, Jobs had changed his tune:

“There is no reception issue, ” he told a second e-mail correspondent. “Stay tuned.”

That’s a message Apple’s PR department seemed to have missed when it released its official statement on the matter:

“Gripping any phone will result in some attenuation of its antenna performance, with certain places being worse than others depending on the placement of the antennas. This is a fact of life for every wireless phone. If you ever experience this on your iPhone 4, avoid gripping it in the lower left corner in a way that covers both sides of the black strip in the metal band, or simply use one of many available cases.”

That explanation was immediately seized upon as evidence of “discrimination” at Apple by a spokesperson for the Left-Handed Club, who suggested that Steve Jobs might begin employing more left-handers in his design and product-testing departments.

Meanwhile, several antenna experts have stepped forward — one who warned of a potential problem weeks before the phone was released — to offer contradictory theories about what’s really going on.

How will the saga end?

Jobs’ second e-mail implies that something will happen soon, and that it probably won’t be a recall.

Apple might solve its PR and technological problems, Kaufman Bros. analyst Shaw Wu told his clients Friday, by giving customers discounts on its $29 iPhone 4 Bumper case.

An alternative theory maintains that the issue is software-, not hardware-related. According to Roughly Drafted’s Daniel Eran Dilger, who cites comments since removed from the Apple’s tech support forums, the company is preparing a firmware update — perhaps as early as Monday — that would change the way the phone calibrates its baseband frequency and, with any luck, make the problem go away.

Stay tuned.

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[Follow Philip Elmer-DeWitt on Twitter @philiped]

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