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The iPhone 4: Annoyed customers, brisk sales

After days of shifting explanations for weak reception and dropped calls on the iPhone 4, Apple has gotten to the bottom of the glitch, said Roy Furchgott in NYTimes.com. The problem is not with faulty antennas or users’ hands blocking wireless signals, Apple says. Rather, the company had been wrongly calculating signal strength, causing the phone to indicate that reception was better than it actually was. A new formula, devised by iPhone carrier AT&T, ensures a more accurate reading. But it “might not satisfy disgruntled iPhone users, because the phone could still drop calls when the signal is weak.”

The smart phone’s reception problems have already prompted at least two unhappy iPhone owners to file lawsuits, said Dawn Kawamoto in DailyFinance.com. Plaintiff Christopher Dydyk alleges that Apple knew of the reception problems before the iPhone 4 was introduced and failed to disclose them, thus defrauding the public. Bad publicity over the reception problems hasn’t hurt sales, though. Apple sold 1.7 million of the latest-generation iPhone model in the first three days after its late-June launch, and could have sold more if not for a shortage of components.

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Software: Google gets deeper into travel

Google has acquired airfare-search software company ITA for $700 million, sowing alarm in the travel industry, said Nick Saint in the San Francisco Chronicle. Travel inquiries contribute 10 percent of Google’s search revenue, and “analysts figure that ITA’s technology could help refine Google’s travel results, allowing it to capture a bigger share of that market.” Antitrust regulators will review the deal to ensure that it doesn’t stifle competition among online travel services.

Insurance: Tensions at the top of AIG

AIG Chairman Harvey Golub and CEO Robert Benmosche have “smoothed over” differences that could have derailed the insurer’s recovery, said Serena Ng in The Wall Street Journal. Benmosche recently threatened to resign after the AIG board, led by Golub, scuttled the insurer’s planned sale of AIA, its main Asian subsidiary, to Britain’s Prudential. Defying Benmosche, the board refused Prudential’s demand that AIG lower its price to $30 billion from $35 billion. AIG now says it will sell AIA via an initial public offering.

Banking: U.S. buys Citi low, sells high

Whittling down the massive taxpayer stake in Citigroup, the U.S. government last week sold 1.1 billion shares of the hobbled megabank, said David Ellis in CNNmoney.com. The U.S. has now unloaded a total of 2.6 billion shares, out of an original stake of 7.7 billion, about a third of Citi’s outstanding shares. The U.S. received the stock in exchange for a $45 billion federal bailout. The shares have sold for an average price of $4.03, netting the U.S. a profit of about $2 billion.

Gaming: Disney snags mobile game-maker

Walt Disney Co. has acquired Tapulous, a leading designer of music-based games for the Apple iPhone and iPad, said Mark Hachman in PCmag.com. Tapulous is the developer of the wildly popular “Tap Tap Revenge” game, which features icons that the player must tap in rhythm to music. Tapulous is likely to develop customized versions of the game featuring Disney recording artists such as Miley Cyrus. Tapulous founder and CEO Bart Decrem and Chief Operating Officer Andrew Lacy will join Disney’s mobile content group. Terms of the deal were not disclosed.