Complaints have included dropped calls, abrupt network switches, poor reception, and service interruptions.

The glitches were reportedly related to a chip inside Apple's music-playing cell phone. BusinessWeek reported last week that Apple was working on a remedy through a software upgrade.

Fix Causes More Problems

Apple declined to offer details about its iPhone 2.0.1 update, other than saying it included "bug fixes." However, comments in Apple's support forum say plenty about the latest attempt to rectify poor user experiences. In fact, the update seems to be causing new issues, apparently interfering with the GPS function, among others.

"The first thing I noticed was the really jerky scrolling in applications like looking at photos and e-mail lists. Anything that had long lists didn't like to scroll, but on the previous firmware it was very, very fast!" Demlotcrew wrote in the Apple support forum.

Other iPhone users reported having no issues with the original firmware, but now having problems with Monday's fix. One user reported the firmware turned the iPhone into a virtual brick. Many users are trying to reinstall the original firmware to avoid the new issues, opting for what they see as the lesser of two evils.

Still Looking for the Root

Richard Windsor, a financial analyst at Nomura Securities, could be right after all. In a research paper released last week, he pointed to similar complaints with 3G phones launched in Europe five years ago and speculated the culprit could be the chipset inside the iPhone 3G. The handset runs on an Infineon 3G chipset.

"We believe that these issues are typical of an immature chipset and radio protocol stack where we are almost certain that Infineon is the 3G supplier," Windsor wrote. "This is not surprising as the Infineon 3G chipset solution has never really been tested in the hands of users. Some people will not experience these problems, as it is only in areas where the radio signal weakens that the immaturity of the stack really shows."

Infineon could not immediately be reached for comment. Apple has not yet acknowledged any issues with its latest handset beyond issuing the firmware fix. If Apple has to issue a recall, it could cost millions.

The Ongoing Soap Opera

"This is almost like a soap opera. There's so much negative press and blogging this. These firmware-update issues are another problem Apple doesn't need. AT&T as a seller of this doesn't need from a PR standpoint," said Bill Ho, a wireless analyst at Current Analysis.

People new to the iPhone are upset that they have to go through two patches in a month and a half, Ho said, and the hard-core loyalists are beginning to question Apple's shine. Before this, it seemed Apple could do no wrong, Ho said, but the iPhone problems are tarnishing its image.

"The question is, will it impact sales despite the allure of the $199 price?" Ho asked. "People will have to take it on faith that this will eventually get fixed because Apple needs to fix it."