T-Mobile (owned by Deutsche Telekom) said the software was available for users to download to their iPhones on Tuesday, but that it was not yet clear if the upgrade would fix all the connection problems. AT&T, the only U.S. network operator carrying the iPhone, confirmed that Apple had provided a software update but declined to give details about what it was aimed at fixing.

That's why earlier this year Google kicked off a competition that awards cash prizes to companies creating innovative applications for its Android mobile platform. The search giant has earmarked US$10 million for the Android Developer Challenge, for which it says it has received more than 1,700 submissions from around the world.

"Complaints over dropped calls and choppy Web connections on Apple's iPhone 3G have sparked a wave of debate...Nomura said problem involves a communications chip made by Infineon...As much as the chip may be the chief problem, glitches may also stem from Apple's software or the AT&T network..."

..the 3G iPhone has poor reception and forces him to spend more time on the 2.5G EDGE network than he thought, but the issue may be with Infineon’s 3G chip, according to Richard Windsor, an analyst with Nomura Securities. In a research note today, he said: “We believe that these issues are typical of an immature chipset and radio protocol stack where we are almost certain Infineon is the 3G supplier.” That comment might cheer AT&T, but it's bad news for Infineon, and perhaps a warning to the chip industry about quality control...