There are obviously a decent number of defalty phones out there as anyone can tell by reading enough of these posts. I get the feeling however that many people who have not had to deal with 3g before are jumping to blame the phone a little too soon. I've gotten lucky. The reception is as expected on my iPhone, but I didn't set the bar that high either (no pun intended). The first thing you should do to begin trouble shooting to see whether the phone or the service is at fault, is to go into an at&t store and ask to see the coverage for 3g in your area. Their public website does not break down the level of service except on EDGE, for 3g it just shows if it's there, not how good it is. You might be amazed to see just how much less coverage there is for 3g than EDGE. (Also, by going into a store you will have several other active 3g and non 3g phones to compare coverage with)
For anyone that is confused as to why the coverage is so much less for 3g and wants to know if help is on the way, here is a copy of a post I left on another forum. For the many of you who are actually holding on to a bunk iPhone, you can use this as ammunition to support your case with Apple that the phone you have is indeed at fault for your connection issues.
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This is both a network and device issue. But which one is affecting you?
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To begin with I have a 3g iPhone and the reception is just as good if not better than my other 3g phones which include the Samsung Blackjack, LG CU 500 and Motorola V3xx, but then again I have sat 3 Blackjacks next to each other at the same time and had different reception on all of them.
Currently anyone can go into an at&t store and ask to see the 3g coverage in their area, and can get the same level of detail as shown on at&t's website for EDGE (why 3g hasn't been updated on the website is beyond me). This is the best way to find out whether the phone or the service is the issue.
For many the network is a bigger factor than the phone issue and I will address this in more detail because this will be changing soon, for the better, and may negate the need for a replacement phone. This is some enlightening information that I have spent a great deal of time researching. I hope you appreciate it. It is a little lengthy but will answer a lot of questions.
As far as the network is concerned, at&t has begun to switch their 3g to 850Mhz all over the country but is still in the beginning stages (At&t currently uses 1900Mhz for 3g, they used to use part of the 850Mhz for its analog network, but just completed migrating the last of the analog users off of it in march. This was government mandated, but I don't think at&t had any complaints as this network was more expensive to run and maintain, and was less secure). As you can probably tell by looking at your reception when on EDGE which currently uses this frequency as well, this will make a huge difference in usability while on 3g not to mention improving battery life.
As mentioned in earlier posts the reason for going to the lower frequency is because the physics of radio frequencies allow the lower frequencies to travel farther and penetrate walls better. This is also why all the wireless providers were jumping on the the sale of the 700Mhz spectrum at the last couple of spectrum auctions held by the US government. The 700Mhz is coming from the old analog broadcast television frequencies as the government is forcing broadcasters to go digital, which uses less space in the airwaves and frees them up for cellular use (This is good for all of us!). We will see this released to wireless carriers beginning in February of '09, however it probably will not be implemented immediately and it is slated for use on a new technology called LTE(3.5g or 4g depending on who you talk to) for most US carriers, except for Sprint which is going with wi-max on their 700Mhz winnings, this means you will need a new phone to take advantage of it.
The easiest way to explain why these lower frequencies penetrate better and travel farther would be to relate to other commonly known frequencies. X-Rays are higher than cellular and will bounce off of bone but not soft tissue. Going even higher to visible light (which is extremely high in frequency) which will not even penetrate soft tissue except when focused with extremely high power in which case it burns right through (think magnifying glass on bugs (-
Now for those who are concerned that their iPhones already weak 3g signal goes up and down while sitting perfectly still. There are many factors that can change the availability of a signal even if you don't move, but because of the inherently lower reception for current 3g these factors become even more apparent, not to mention that the higher frequency of the current 3g is effected by more factors than the lower frequency of at&ts EDGE. As you can see this does not necessarily mean that there are cheap materials in your phone. Radio waves are effected by various natural phenomenon such as weather (most notably and frequently wind, because of how it can effect the leaves on the trees in between your phone and the tower with which it is trying to communicate, not because the wind itself does anything to hinder the signal directly), however there are many issues that arise from weather phenomenon that is not as familiar to the lay person, such as solar flares and magnetic storms to name a few, which by the way are going on all the time even though most of us are oblivious to them. Probably the most interesting effect of weather on your phones radio signal is with sudden changes in moisture and temperature in high pressure areas. This can actually cause your signal to extend to well over a thousand miles! It can also cut your signal short. For more detail on some of these phenomenon check out this article on wikipedia
http://en.wikipedia.org/wiki/Radio_propagation.
Hopefully you now have a better understanding of what is going on with your network and your surroundings and how they effect your reception. I will continue with the information on the phone itself in a later post as it is getting too late to write intelligibly.
So, if after reading this you feel it's worth waiting to see if the network will improve enough to justify sticking with the iphone then until that point you can always turn off 3g when you don't need to be on the web and you will have the reliability of the original iPhone and the EDGE network for calling and short sessions on the web when you have patience and can't get 3g.