UPDATE 1-Consumer Reports will not recommend Apple iPhone 4

* Latest blow for device that sold 1.7 mln units in 3 days

* Antenna glitches cause weak reception and dropped calls

* AT&T network not necessarily to blame

* Analyst says report could affect sales
(Adds analyst comment, updates share price, adds SAN FRANCISCO
dateline)

SAN FRANCISCO, July 12 (BestGrowthStock) – Consumer Reports said it
cannot recommend Apple’s (AAPL.O: ) iPhone 4 to buyers after
tests confirmed the device’s well-publicized reception
glitches.

It added that that AT&T Inc (T.N: ), the exclusive mobile
phone carrier for the iPhone 4, was not necessarily the main
culprit.

The influential nonprofit organization, which publishes
guides on everything from cars to TVs, said in a report
released on Monday that it also tested other phones —
including the iPhone 3GS and Palm (PALM.O: ) Pre — and found
none had the signal-loss problems of Apple’s latest iPhone.

The report was the latest blow to the iPhone 4, which sold
1.7 million units in its first three days on the market but has
been plagued by complaints of poor reception. Many of the
complaints involve a wraparound antenna whose signal strength
is said to be affected if touched in a certain way.

Kaufman Bros analyst Shaw Wu said he was surprised by the
stance that Consumer Reports took on the new iPhone. Wu noted
that the group’s recommendations are used as a guide by many
consumers.

“Consumer reports is a respected publication. This could
have an impact on iPhone sales,” Wu said.

Apple shares were down 1 percent at $257.06 on Monday
afternoon on the Nasdaq.

The company has been sued by iPhone customers in at least
three complaints related to antenna problems. [ID:nN01232594]

“When your finger or hand touches a spot on the phone’s
lower left side — an easy thing, especially for lefties — the
signal can significantly degrade enough to cause you to lose
your connection altogether if you’re in an area with a weak
signal,” contributor Mike Gikas said in a report on the
Consumer Reports website.

“Our findings call into question the recent claim by Apple
that the iPhone 4’s signal-strength issues were largely an
optical illusion caused by faulty software that ‘mistakenly
displays 2 more bars than it should for a given signal
strength,'” Gikas said.

Apple did not respond to a request for comment.

Gikas recommended covering the gap in the wraparound
antenna with duct tape or some other non-conductive material.

Apple has said almost any cellphone will suffer a loss of
signal if held in certain ways. It said later it had discovered
a software glitch that overstates signal strength, though it
did not directly address concerns about the antenna with that
admission. [ID:nLDE66201D]

On the flip side, Consumer Reports said the iPhone scored
high on other testing grounds such as battery life, sharp
display and high-quality video camera.

However, Gikas said the signal problem was the reason the
iPhone 4 would not be classified as a “recommended” device in
its smartphone ratings.

“Apple needs to come out with a permanent — and free —
fix to the antenna problem before we can recommend the
iPhone4,” said Gikas in his blog post on ConsumerReports.org.
(Reporting by Carolina Madrid and Gabriel Madway; Editing by
Edwin Chan, Matthew Lewis and Steve Orlofsky)

UPDATE 1-Consumer Reports will not recommend Apple iPhone 4