The iPhone 4's second Vietnam: the proximity sensor (updated)
The iPhone 4’s second major problem isn’t getting nearly as much attention asthe first, but it’s arguably just as bad — because it causes you to drop calls. The only difference is that your face is to blame, not AT&T’s craptastic network.
The proximity sensor in the iPhone 4 is what tells it how close the phone is to your face so that it can turn the touchscreen off while you’re making a phone call. This has the effect of a) saving battery power, and b) preventing inadvertent touches of the screen by your face