Consumer reports have completed their Lab test on the Apple iPhone 4 and appear to have confirmed a design defect with the antennas.

It’s official. Consumer Reports’ engineers have just completed testing the iPhone 4, and have confirmed that there is a problem with its reception. 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. Due to this problem, we can’t recommend the iPhone 4.

I rarely hold my 3GS without a case, I’m not left handed, our network in Australia is heaps better than AT&T’s appears to be, I imagine I’d be unaffected. But others will, so why didn’t they just send out a couple thousand free cases.

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.”

As I said at the time Apple PR shared that bullshit, it smelled false. Now all the great stuff about your device will be forgotten about.

The iPhone scored high, in part because it sports the sharpest display and best video camera we’ve seen on any phone, and even outshines its high-scoring predecessors with improved battery life and such new features as a front-facing camera for video chats and a built-in gyroscope that turns the phone into a super-responsive game controller. But Apple needs to come up with a permanent—and free—fix for the antenna problem before we can recommend the iPhone 4.

Better to admit a design flaw which impacts a small percentage of your users than to allow others to own the conversation about your brand.

Idiots

Read the full Consumer Reports article

UPDATE: Marco Arment, iPhone lover and Instapaper and Tumblr developer says basically the same thing in much more extensive terms.