In what may be the biggest snub for the iPhone 4 thus far, Consumer Reports has announced that it cannot recommend the phone after extensive testing of its widely reported reception issue — wherein touching its lower-left corner significantly reduces reception.

Consumer Reports Mike Gikas writes:

We reached this conclusion after testing all three of our iPhone 4s (purchased at three separate retailers in the New York area) in the controlled environment of CU’s radio frequency (RF) isolation chamber. In this room, which is impervious to outside radio signals, our test engineers connected the phones to our base-station emulator, a device that simulates carrier cell towers. We also tested several other AT&T phones the same way, including the iPhone 3G S and the Palm Pre. None of those phones had the signal-loss problems of the iPhone 4.

Apple has faced considerable criticism for the issue, and even more so for its lackluster response. Apple CEO Steve Jobs famously replied to a customer’s email with “Just avoid holding it that way.” The company’s initial response was to downplay the issue, then it went on to apologize for it. Apple never actually admitted to a reception issue, instead it said that the real issue was that the phone’s reception bars were not being displayed correctly. The company announced that an upcoming software update will fix the reception bar problem.

But according to Consumer Reports’ testing, the reception issue is indeed very real. The report isn’t something Apple can avoid very easily. Unlike tech blogs, Consumer Reports is something that general consumers are more aware of. At this point, the situation is bad for Apple whether it admits to the issue or not. If it doesn’t, it would appear to be ignoring reality. If it does, then Apple would basically be admitting that it lied to the public with its previous responses.

Consumer Reports’ simple solution to the issue is similar to many do-it-yourself web fixes — just cover the lower-left portion of the phone with duct tape. CR didn’t have a chance to test how cases helped, but we already know that using one of Apple’s bumper cases alleviates the problem.

“Apple needs to come up with a permanent—and free—fix for the antenna problem before we can recommend the iPhone 4,” Gikas writes. Consumer Reports continues to recommend the older iPhone 3G S.

[Image credit: Wasabimon]