Yes,you are right,the 1st gen iphone use gsm technology which mean 2G,3G is next gen of 2G,it has higher enhanced radio than 2G,why it is?ye,pls read technical standard of 2G,3G,it is not a easy thing for no professional to read it.
Source(s):
http://en.wikipedia.org/wiki/3G
http://en.wikipedia.org/wiki/IPhone

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The original iPhone only has a 2G radio in it. The new iphones have a 3G radio in it. The original iPhone's radio isn't flawed, or deficient, but something different entirely. The network towers used to receive and broadcast these frequencies are separate and different. The 2G coverage is different than the 3G coverage map.

To Test this, you can try turning off the 3G features of the newer device, and see if the number of bars more closely matches the original iPhones reception. This would confirm that the towers in the area only offer meager 2G coverage in the apartment, and that the 3G coverage is far superior at that location. If this test shows the original iPhone still having less bars, then it would be proof that the original iPhones radio chip, given the same coverage area, and frequencies, is in fact lesser.

But I think it's just the difference in coverages for 2G networks, vs the 3G network coverage.
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