Good to see I am not the only one having this issue. I have the smae issue on the my iphone5 (received on 9/25). Wifi signal bar shows waek signal and cuting in the out. The first one i have i noticed the wifi signal bar is weak and wifi is cutting in the out. I bring it to Apple store yesterday(9/30), they can duplicate the issue. They can't even connect to Apple store's wifi. so they replaced a new one for me and it seems connect correctly at Apple store.
However, When I got home, I notice the new one the wifi signal bar is still bouncing. it's better than the first one I got. Iit extend about 10 more ft but still not right. I compared my iphone 5, my firends' two iphone 5 and my iphone 4 and tried at different locations and use different routers . It's very noticeable that my iphone wifi signal is weaker than all the other iphones.
I bring it back to Apple store again(10/1), now they are saying it's connect to Apple's Wifi. so it's not he phone issue. it's my wifi router. I tried to explain to them the difference on this iphone 5 and the others. They just said it was repalced and they cannot replace another one for me sicen it's working in Apple Store. I tried to explain to them it's will connect if Ithe device is close to the wifi antenna where Apple store is the case, if you go further it will dispear. They don't even want to test.
They just told me i have to wait and use it couple days so they can run diagnose on my phone(watch out, Apple is collecting some data on your phone remotely. I don't know what is collected but soulds scary). Ok, I will wait, but I really double if they can tell the difference one the wifi signal.
I have to say, there have some issues on this wifi antenna connection. so far it seems they don't think it's an issue. Let's shout it out loud and get Apple's attention.