Some Apple iPhone 3G customers have been having problems with their 3G connection, dropped calls and slow downloads. Neither Apple nor AT&T nor Infineon (reported maker of the 3G radio chip) have had much to say so far. Sources say that Apple plans to fix the problem with a firmware update, according to BusinessWeek on Thursday.

The problem has been attributed to the Infineon chips inability to switch properly between the EDGE and 3G networks.

The BW sources also said that Apple prefers the firmware update over the more expensive approach of recalling the iPhones already shipped. [Some have been critical of Apple's secrecy to the point of not letting some carriers outside the U.S. test the new phone on their networks prior to July 11.]

The problem has been sporadic, affecting only about 2 to 3 percent of the iPhone traffic. "This is a problem, but it's not a catastrophe," one of the sources added. Also, according to the source, Apple's software demands a strong 3G signal, more than the phone really requires. As a result, in high traffic areas, the iPhone can prematurely switch to EDGE.

However, another theory is that AT&T hasn't installed enough 3G equipment in some high traffic areas to absorb the new loads from 3G phones. There are reports of Apple customer service reps advising customers to turn of the 3G feature if they have problems, which has only irritated the users who bought the iPhone 3G for that feature.

BusinessWeek's Peter Burrows recalled that Nokia had similar problems when 3G was rolled put in Europe earlier this decade, and suggested that that the iPhone's current problem is just one of the growing pains typical of cutting-edge technologies.