Consumer Reports says it can't recommend the iPhone 4 after tests by its engineers confirmed that the device does indeed have reception problems, dealing yet another blow to Apple's snazzy new phone.

While the iPhone 4's reception woes have been widely reported, Apple (AAPL) recently blamed the issue on a long-time software glitch (that it suddenly discovered) that erroneously indicated a stronger signal strength than was actually available. Apple also said the problem even affected earlier iPhone models. But Consumer Reports pooh-pooed such a claim in a blog post on Monday:
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."

The tests also indicate that AT&T's network might not be the primary suspect in the iPhone 4's much-reported signal woes.
For starters, test engineers with Consumer Reports conducted their experiment in a room impervious to outside radio signals and hooked the iPhone 4 to a device that acted like a cell tower. The iPhone 4 and other smartphones, such as the Palm Pre and even an iPhone 3GS, were all tested, but none suffered the signal-loss drop like the iPhone 4.

Consumer Reports, like other reviewers, noted that a cheap and easy fix to cover the antenna gap on the lower left side of the phone is to use masking tape, duct tape or another thick, nonconductive material. It's ugly, but evidently it does the trick.

The lauded publication says it has yet to test the "repaired" device with a case but will do so later this week. Others who've tried the masking tape trick, however, have reported success with using a case, and one plaintiff in the several lawsuits that have been filed against Apple over the iPhone 4 reception problems has suggested the computer maker provide a free case with every iPhone 4.

In the meantime, Apple won't be getting a seal of approval from Consumer Reports, until it devises a "permanent -- and free -- fix for the antenna problem."

So much for the bells and whistles that come with the iPhone 4, like the sharpest display and best video camera Consumer Reports says it has ever seen on a phone. Like most things in life, it comes down to the basics.

Apple was not immediately available for comment.

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