Consumer Reports won’t OK Verizon iPhone

NEW YORK (CNNMoney) — The Verizon iPhone 4 has a reception-killing design flaw similar to the one found on AT&T’s version of the phone, product reviewer Consumer Reports said Friday.

The problem occurs when a user grips the gap between the iPhone’s two antennas. As a result, Consumer Reports is not including the Verizon iPhone on its list of recommended smartphones.

Consumer Reports’ lab tests showed that when the Verizon iPhone is held in a “specific but quite natural way … [it] has a problem that could cause the phone to drop calls, or be unable to place calls, in weak signal conditions.”

It’s similar to the flaw Consumer Reports found on the AT&T iPhone in July. The resulting “death grip” kerfuffle at that time was a PR nightmare for Apple (AAPL, Fortune 500), and for AT&T (T, Fortune 500). (Apple CEO Steve Jobs famously told a customer: “Just avoid holding it in that way.”)

The Verizon iPhone “performs superbly in most other respects,” Consumer Reports wrote in its blog post, and using a case “can alleviate” the covered-gap problem.

Consumer Reports tested the Verizon iPhone 4 along with several other Verizon phones, including the Samsung Fascinate, several Motorola Droid models and the LG Ally. None had the signal-loss problems that the iPhone 4 demonstrated.

AT&T iPhone vs. Verizon iPhone: The tests also showed the Verizon iPhone’s outgoing calls “sounded better” than they did from the AT&T iPhone. But the AT&T version had the edge for incoming call quality.

Consumer Reports noted that because Verizon’s iPhone runs on its CDMA network, users cannot place a voice call and surf the Web at the same time. Apple’s GSM network does allow that type of multitasking.

Overall, Consumer Reports concluded, the Verizon iPhone 4 “closely resembles” the AT&T version in both its pros and its cons.

The report also noted “there have not been widespread reports of reception difficulties with the Verizon iPhone 4, and Verizon’s network, unlike AT&T’s, has received above-average scores from our readers for the reliability of its voice service.”

However, those ratings were collected before the Verizon iPhone’s launch. It remains to be seen whether Verizon will suffer the same fate as AT&T — which ranked dead last in a recent survey of customer satisfaction ratings.  

First Published: February 25, 2011: 3:45 PM ET