Apple decision on iPhone antenna problem coming tomorrow

Click here to read Dan O'Shea's take on the antenna controversy, "Connectivity's revenge."

Apple has scheduled a press conference for Friday and is expected to address growing concerns around antenna problems on its new iPhone 4 device.

The press conference is scheduled for 10 a.m. PST at its Cupertino, Calif., headquarters, according to reports. Apple has not said what the topic for the press conference will be, but the antenna issue would seem to be the likely topic (Apple CEO Steve Jobs typically – and famously – announces new products on stage at Apple events).

Apple would appear to have a few options: issue a hardware “fix,” such as a bumper that would change how users hold the device, and free up access to the antenna; issue a software fix, which has been discussed but wouldn’t address hardware issues; or issue a full-scale recall of the device, which some estimates place at a $1.5 billion hit to Apple’s bottom line.

The recall option would also have massive ripple effects across the industry, including impacting partner AT&T’s data revenue and opening the door for Google, Microsoft, RIM, Nokia and others to slice into Apple’s large lead in smartphone sales.

Concerns about the antenna problems had been growing since the phone's June 24 debut but hit the mainstream this week with a Consumer Reports story that called on Apple to fix the problem and even mainstream media shows – which have given Apple’s iPhone and iPad so much free publicity – addressing the issue, including a Top 10 list from David Letterman (see video below).

Apple has sold millions of the iPhone 4 devices, including a reported 1.7 million in just the first three days on the market.

According to a report today from Bloomberg, an Apple engineer – as well as a carrier partner – expressed concern about potential antenna problems last year. The iPhone 4 antenna is placed at the bottom of the phone and can be degraded when a user places a hand over it – a fairly natural position when holding a smartphone device.

Such reports could further complicate Apple’s response to the problem.