Finally, some relief is in sight for iPhone 4 users bedeviled by the proximity sensor bug. I called it Apple's second Vietnam on July 5 because the proximity bug is a worse problem than Antennagate. Simply put, the antenna problem is easily mitigated with a case (or a piece of tape) -- but the proximity sensor bug is a deal breaker, especially when it causes you to hang up on/mute/Facetime calls with clients.
The proximity sensor in the iPhone 4 is what tells it how close the phone is to your face so that it can turn the touchscreen off while you're making a phone call. This has the effect of a) saving battery power, and b) preventing inadvertent touches of the screen by your face.
The problem is that the proximity sensor in the iPhone 4 is on a hair trigger. It's either not sensitive enough, miscalibrated or both. In over three years of using the iPhone 2G, 3G and 3GS I've never accidentally hung up on, muted or put a call on speakerphone while holding it up to my face -- not once. Yet I've done it a half dozen times on my iPhone 4 over the past weekend.
There are conflicting reports about whether Apple fixed the widely-reported iPhone 4 proximity sensor issue in iOS 4.1 beta 2. MacRumors says the issue hasn’t been addressed, but Cult of Mac says that beta 2 fixes the bug. As an added bonus, Cult reports that beta 2 also includes a baseband update (AT&T 7.1), which apparently fixes HSUPA upload speed issues -- which slowed video and photo uploads to a crawl.
The iOS 4.1 beta 2 update is only available to developers, but it could be released as soon as the end of August if testing goes well.
Update: I hate to be the bearer of bad news but iOS 4.1b2 didn't fix the issue for my iPhone. I faceTimed a couple of callers today.