iPhone 4/iOS 4 bluetooth muffled on other end

I just got my iphone4 and I have having the same problem. I use my phone for business, and I always review a voicemail before accepting it to make sure the signal is clear. However, weather I use the headset, mic, or speakerphone, it sounds muffled and as though I am speaking through a tunnel. Should I return my phone? This is simple unacceptable. I'd rather go back to my 3GS if this is what I should expect.

Is it running iOS 4.1?

I've struggled with bluetooth since I purchased my iPhone 4. I have "upgraded" to all updates. I still cannot use Bluetooth. I don't know if you have contacted tech support... They will tell you that they don't have a bluetooth issue. The problem is that the phone is too advanced for the device that you have. (sarcasm... but this is what I was told)

Anyway... Support is useless. I would go back to your 3GS. Oh... Don't upgrade it to iOS 4.x. I've heard from others that you will then have problems with bluetooth.

Don't get over-excited about such easy solutions. My 5c.

While the muffled, "I'm in a tunnel" sound is gone with 4.1, I now keep getting reports that I'm "breaking up". Usually happens every other call or so. Using a Plantronics Voyager Pro w/ iPhone 4. Pretty much sick of it at this point. I use my phone for business calls every day. Time to find another solution.

Restored my iPhone as new again to 4.1 (mind you, I am using a 3G and facing similar issues) and people now report that I sound fine; this has been the case with EVERY time I restore my iPhone as new; only it lasts for around a week (around 10hrs of talk time) and then remote/tunneled/garbled/intermitted sound issues return.

I also had great success with a complete wipe and setup as new phone. No more poor quality sound complaints and the bluetooth range improved tremendously to where I could roam around the house (very small house...) and continue talking with the phone sitting on my desk (like I used to do all the time with my 3GS without any issues).

However this only lasted about a week, and now I'm back to square one again with poor quality sound complaints, and the range is so bad, that if I turn my head away from the phone (sitting on the desk in front of me), it drops the BT connection.

I have the same problem as the last couple of posters...

If I delete and re-pair the bluetooth, it sounds good for a short while. It doesn't seem to matter if I simply delete and re-pair, reset all the iPhone's settings, etc. It always fixes the problem as well as the short range....temporarily.

However, the problem ALWAYS comes back after a couple of days at best (I'm on the phone 4+ hours a day for work). I have tried every workaround out there, installed 4.1 as a "new" phone, etc. Doesn't matter. Eventually, it gets to the point where calls break up horribly and the headset drops it's connection if I get more than a few feet from the phone.

This doesn't even make any sense!!

Has apple admitted that there is a problem here?

I have the same issue. I was speaking with my daughter and she says she has the same problem when she gets calls from her boyfriend who also has an iPhone 4.

Same issues. Find it interesting that I can listen to audiobooks or the ipod function with absolutely no issues on sound quality (there are some distance issues). The sound quality issues seem to be related to the interface between the phone function and the bluetooth function, not necessarily the bluetooth itself.
I tried the complete reboot suggested a few pages ago on this thread with no luck except I lost all of my data. Got my contacts back from my old PC, so if the issue lurks in old backups then I guess it has wormed its way back into my phone.
When I did the reboot the Apple Tech told me that Apple has not yet posted an "approved" fix.
I have never posted a complaint on one of these boards before. But this issue was enough to push me over the edge. And I find the fact that Apple will not admit there is an issue to be very upsetting.

Is there anyone NOT having bluetooth issues - at least intermittently with an iP4 and 4.1? I can't even use my BT for work calls anymore (4+ hours/day - I work from home). It either disconnects frequently or people are always asking me to repeat myself because I break up so bad.

I'm tempted to exchange my phone for another at the Apple store, but I'm not confident it'll help based on the number of threads here.

OK, I decided to swap my iP4 out for another at the Apple store. Not sure it'll make a difference, but I'll keep the thread updated with my findings.

After doing my previos fix to install 4.1 from scratch as a new phone which I have posted earlier the only Bluetooth headset that that has worked perfectly for 3 weeks is the BLUEANT Q2 it has past the test. The Jawbone Icon, Plantronics Pro Voyager and Motorola H17 had only worked for a few days and then back to the same old problems. Again the Blueant Q2 is working perfectly if you do the correct install in which I have posted earlier on this thread.

Mine seems to be working fine since 4.1, and I use my bluetooth at least one a day (Plantronics 925).