Apple said that's the reason behind widespread complaints from users that the latest model, iPhone 4, shows a big drop in signal strength when held in a way that inadvertently blocks the antenna at the bottom of the phone.
That drop seems exaggerated because the phone can wrongly display four or five bars of signal strength when it shouldn't, Apple said.
"Their big drop in bars is because their high bars were never real in the first place," the company said in a statement.
Apple launched the iPhone 4 on June 24 in the U.S. and four other countries. The incorrect formula was present in the original iPhone, launched in 2007, Apple said.
Some outside engineers and users have blamed the iPhone 4's apparent reception problems on the design of its novel antenna, which is incorporated in the case. But the company said that any phone will show reduced reception if held that way, since nearly all manufacturers put the antenna at the bottom. It maintains that the iPhone 4's wireless performance is better than previous models.
Apple, which is based in Cupertino, Calif., said it will fix its signal strength formula to conform to other AT&T phones through a free software update for iPhone models 3G, 3Gs and 4 within a few weeks.
"We are also making bars 1, 2 and 3 a bit taller so they will be easier to see," Apple said.
(This version corrects quote to 'totally' wrong instead of 'completely.')