Update: Apple offers advice for iPhone 4 antenna issues 5:48 pm PT

There have been a lot of reports from users of Apple’s new iPhone 4 that the antenna suddenly drops when you hold it in your hands, but nobody has been able to nail down the cause yet. I talked to a number of people this morning familiar with the iPhone 4 development and said much of the testing of the iPhone 4 was done with the device in a case to disguise it. Think back to Gray Powell’s iPhone 4 and the fact it was found in a case that made it look like it was a regular iPhone.

This may have hidden the cause of the antenna problems from engineers. The fact that Apple’s campus is fitted with repeaters for wireless service, also helped blocked what could be the cause for the problem.

According to people I’ve spoken with, it could be that moisture from your fingers is causing the iPhone 4 to believe that the antenna is receiving interference and losing its wireless signal.

This is why the iPhone 4 Bumpers seem to work so well. I’ve talked to quite a few people in the last 24 hours to get a better feel for who is experiencing this problem and it here’s what I found.

Nobody that is using the Bumpers is having the dropped bars for AT&T’s signal, while those that opted to not purchase the Bumpers are. I also haven’t spoken to anyone that actually dropped a call from this phenomenon, although I’m sure there are plenty that have.