By Tom Krazit
Friday, August 15 2008 10:38 AM
URL: http://www.zdnetasia.com/news/communications/0,39044192,62044900,00.htm

The issues plaguing the iPhone 3G are indeed related to a chip inside the phone, according to a new report, but the solution could be easier than expected.

Business Week is reporting that, according to its sources, Infineon's chip inside the iPhone 3G is the root cause of the reception problems that numerous iPhone 3G owners have reported over the last month. Nomura Securities analyst Richard Windsor first suggested Infineon was to blame in a research note earlier this week.

The good news, however, is that Apple believes it can fix the problems with a software upgrade, according to Business Week. A Swedish researcher who had discovered sensitivity issues in the iPhone 3G's chipset thought the problems would have to be solved through some sort of recall, but Apple and Infineon are said to be testing a software update that could be released perhaps as early as the end of this month.

This article was first published as a blog on CNET News.com.