Apple’s recent explanation that iPhone 4 reception issues are linked to Apple’s miscalculation of how it measures signal strength on iPhones, has left many people wondering what that five-bar icon displayed on the phone really means.

Earlier on Friday, Apple issued a statement blaming iPhone reception issues on a software miscalculation rather than on hardware design. Since the iPhone 4 launched last week, thousands of consumers have complained that when gripping the phone around the lower left-hand corner of the device, the signal degrades or calls are dropped.

Apple acknowledged the problem, and explained that customers were simply covering up the antenna with their hand. Now the company says its engineers have made a “stunning” discovery.

People may be finding that their reception is poor and that calls are being dropped not only because they’re holding the phone wrong, but also because they think they have a better signal than they actually do. In the statement, Apple says that it had made a mistake in the formula that calculates the number of bars that display the signal strength on all of its iPhones.

But experts say that the bars that one sees displayed on any cell phone can be misleading. CNET talked to Ron Dicklin, co-founder of Root Wireless, a company that tests and provides accurate data on wireless network and consumer phone performance, to get some answers. Based on that conversation and some additional research, CNET put together this FAQ.

What do the wireless signal bars that appear on the upper left corner of my phone mean?

They are supposed to represent the handset’s ability to connect to the cellular network based on how powerful the carrier’s radio signal is being received. The five bars measure the decibels of power that is being received from the cell phone tower.

What does it mean if I have fewer bars versus if I have more bars?

The closer you are to a cell tower and the more powerful signal you receive from the cell tower, the more bars you’re likely have. If the signal strength is too low, you may have trouble completing a call or receiving data. And if you can make a call, the likelihood that a call may drop or a data connection is interrupted is higher.

Is it different if I have fewer bars on a GSM phone versus using a CDMA phone?

Yes. With GSM, the technology that AT&T and T-Mobile USA use, the probability of having an issue with the cellular network at the lower bar range is going to be higher than with CDMA. CDMA, which is the technology used by Verizon Wireless and Sprint Nextel, is more efficient in how it manages its connection with the network. So even at the lower signal range with CDMA, as long as there’s not a high level of noise due to network congestion, you can maintain a connection just fine.

In raw numbers, what is the range in decibels of what’s considered a good strong signal and one that is weak?

As a rule of thumb around -113 decibels is on the low end of the signal bar range, and around -50 decibels is on the high end (more signal bars). The closer the decibel measurement is to zero, the stronger the signal.

Apple said it was “stunned” to discover the formula it used to calculate how many bars of signal strength to display is totally wrong. What does this mean?

While one might assume that each bar represented on the iPhone signal strength icon represents the same number of decibels, apparently that’s not the case. According to testing by the Web site AnandTech, the fifth bar on the iPhone represents about 40dB, but the fourth bar only represents about 10dB. The third bar represents a change of only about 2dB. The second bar represents 4dB, and the first bar represents a difference of 6dB.

Why doesn’t Apple just measure the bars in a linear fashion so that each bar represents an equal share of decibels?

Because the range is so big, it’s harder to diagnose problems at lower signal strengths. Signal strength measurement doesn’t need to be very granular at the top end of the scale because performance is only affected when it drops off considerably. But more granularity is needed in the lower part of the scale.

Is there a standard way that cell phone manufacturers use to measure the signal strength?

Unfortunately, there is no standard way to measure signal strength. One of the steps Root Wireless performs to properly validate that its on-device metering software is working correctly, is to put each of the supported handsets in a lab which measures a known decibel rating against what the handset reads and displays in signal bars. Through its tests, Dicklin said, the company has seen rather large differences in how handset manufactures relate decibels to bars.

Is there a more precise way of measuring signal strength other than the five-bar graphic?

Smartphones, such as those using the Android software and RIM’s BlackBerry, can also display reception in terms of numeric decibels instead of just as a five-bar graphic. But AnandTech points out that Apple has removed the tool.

Should I even care about these wireless bar signals?

Yes. If the phone is working correctly you probably wouldn’t reference it much, but if you are having an issue it’s a good tool to help isolate what the problem may be. It’s like a gas gauge on a car. If you were driving down the road and your car suddenly stopped and the gas gauge reads empty, you’d conclude that the reason your car stopped is because you ran out of gas. If you are having problems with a call and the signal bars are low, you’re probably not able to make the call due to poor signal strength.

So if I have all five bars of service my phone should work perfectly?

Not necessarily. You can have full signal bars and if the network is heavily congested you will still have problems maintaining a good connection. This condition happens more in heavily populated areas where many people are using the network at the same time, like in big cities and at sporting events for example.

By Marguerite Reardon