iPhone issues caused by power chip?

Another plausible scenario for the iPhone 3G reception problems primarily experienced in the US has emerged: it's related to faulty power-control software.

RoughlyDrafted reported Thursday in the US that a source within AT&T blamed "faulty" power-control software inside the iPhone 3G for the dropped calls and poor reception that owners have been experiencing since the device was released in July. Widespread problems have not been reported in Australia.

In short, the iPhone 3G demands too much power, more than is necessary, from a local cell tower to maintain a connection, and when multiple iPhones try to connect to the same tower, the problem snowballs.

The iPhone OS 2.0.2 software update was designed to fix this power-control problem, according to RoughlyDrafted's source. However, the source believed that the problems would not go away entirely until all iPhone 3G owners, or at least quite a few, upgraded to the 2.0.2 software:

In a mixed environment where users are running 2.0, 2.0.1, and 2.0.2, the power control problems of 2.0 and 2.0.1 will affect the 2.0.2 users. It is not the network that was at fault but the interaction of the bad power control algorithm in 2.0 and 2.0.1 software and the network that is at fault. The sooner everybody is running 2.0.2 software, so the theory goes, the better things will be.

This would explain why the problems were more pervasive in populated areas with lots of iPhone 3G early adopters, such as San Francisco, Chicago, and New York. It would explain why those who updated to the 2.0.2 software didn't see improvements across the board. And it would explain why the problems are being reported around the world, not just on AT&T's network.