The iPhone 4 signal problem is a big one. Make no bones about it: the phone is a stunning example of aesthetics, UI and simplicity working together, but the fact that holding the thing dramatically reduces the signal is a huge and almost unforgivable oversight.

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Apple’s official response has been a bit of a mix of ‘there’s nothing wrong’ and ‘there is something wrong, but it’s not what you think,’ the latter referring to the company’s conclusion that the way that iPhones display signal bars has been wrong the entire time. The update to iOS 4.01, which is now available, is supposed to fix the problem and make everything kosher, but our test with the update throws that out of the window.

Using the app Speedtest, which measures upload and download speeds, we ran a test on an updated iPhone 4 to see if iOS 4.01 actually made any difference. The results are as follows:

iPhone 4 not held (stationary on desk):
Download speed: 1982kbps
Upload speed: 214kbps

iPhone 4 held normally (not squeezed):
Download speed: 31kbps
Upload speed: 4kbps

We probably don’t need to tell you that that’s fairly shocking. On repeat tests the results did fluctuate, but every time there was still a big glut between the held and not held results. We’ll have to wait until 6pm tonight to see what’s said at Apple’s reluctantly pulled-together conference, but for the mean time it appears that the iOS 4.01 update does next to nothing to help the phone’s biggest failing.