Well, at least now we know. There is an issue with signal bars dropping with iPhone 4s due to the so-called "death-grip". Apple admits as much in an official letter posted on its website.

But there's no actual loss of signal according to Apple. It turns out that rumours of a software issue resulting in the wrong amount of signal bars being displayed have proved to be true.

The letter reads:

"We were stunned to find that the formula we use to calculate how many bars of signal strength to display is totally wrong. Our formula, in many instances, mistakenly displays 2 more bars than it should for a given signal strength. For example, we sometimes display 4 bars when we should be displaying as few as 2 bars. Users observing a drop of several bars when they grip their iPhone in a certain way are most likely in an area with very weak signal strength, but they don’t know it because we are erroneously displaying 4 or 5 bars. Their big drop in bars is because their high bars were never real in the first place".

To fix the problem Apple is going to roll out an upgrade to the iOS 4 software "within a few weeks" that will use a new AT&T formula for calculating bar displays of signal strength.

Apple insists that the reception on the iPhone 4 is the best it has ever shipped and it goes on to remind iPhone 4 customers that if they are not entirely satisfied with their iPhone 4s, and if the device is not damaged, then they can return them within 30 days of purchase for a full refund.

In short this letter reads: There is an issue, it's software related, we're going to fix it, if you still aren't happy then return your phone.

We don't think that many of the 1.7 million+ iPhone 4s will be returned, do you?

/http:/www.apple.com/pr/library/2010/07/02appleletter.html">You can read the full letter here.