According to Apple, the fault on the new iPhone 4 is a display error, rather than a signal fault.

Apple has announced on its website that it was surprised at the apparent fault of the iPhone 4, which had customers complaining about drops in signal.

After the new iPhone’s launch at the end of June, users had complained that signal strength and reception fell significantly when the phone was gripped in a certain way. Some consumers have found that signal drops when a hand covers the antennae placed in the lower left corner of the phone.

However, after an investigation into the fault claims, Apple has stated that the fault lies in the formula used to calculate how many bars of signal strength is displayed.

The statement said: “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.”

Apple hastened to add that “gripping almost any mobile phone in certain ways will reduce its reception by 1 or more bars” and that a free software update will be available in the next few weeks to rectify the problem.

Despite Apple’s assertion that the problem is purely a design flaw, some experts believe that the problem could run deeper than that.

Apple apologised for any anxiety caused by the fault and reiterated that customers who were still not satisfied with the product can return the phone within 30 days of purchase for a full refund.

The iPhone 4 has been Apple’s most successful product launch to date and sold more than 1.7 million in three days.