Continuing faulty antenna issues with the iPhone 4 may lead to a product recall, an embarrassing event for Apple, which may have costs of up to $1.5 billion USD.  It is harder to put a price on the cost to Apple’s reputation.

Consumer Reports stated that it could not recommend the iPhone, due to the antenna, which, if the device is held a particular way, substantially cuts the phone’s reception resulting in “signal loss issues”.

This result was upheld by Engadgets, who in their own testing, found that the iPhone 4′s dropped calls and experienced low data rates at a much higher frequency than other phones.  Engadget‘s full review of the iPhone 4 is here.

Consumer Reports blog contains further detail as to why the iPhone 3 is preferable to the latest model.