The Symptoms:

A couple of days ago my first generation iPhone stopped producing audio out of the built-in ear piece, or picking up audio out of the built-in microphone. I could make and receive calls, but there was no sound either on my end or the other end of the call. SMS worked normally. So did all other functions including Safari.

The Problem:

The iPhone has a sensor in the headphone jack that is aware of wether or not headphones are plugged in. It’s what tells the phone to turn off the built in earpiece and microphone so that the earbuds can be used. This sensor, I’ve found, is sensitive to dust and dirt and needs to be cleaned every so often. If it’s not clean it can get confused (for lack of a better word) and think that headphones are plugged in when they are not.

Testing to see if this is your problem:

This article helped me diagnose the problem. The easiest way to tell if your phone “thinks” an empty headphone jack has something plugged into it is use the controls on the side of the phone to turn the volume up and down. If the word “headphones” appears under the volume icon, and you have nothing plugged in you have the same issue I did.

(Incidentally: this is the second time I have had this issue. The first time it was because something had gone seriously wrong with my iPhone and it was accompanied by a warning message that said something like (I’m paraphrasing) “This device is not approved for use with iPhone.” This warning appeared every fifteen minutes or so, and the phone was otherwise functional. Still, there was nothing I could do to make the error message stop appearing and I ultimately had to take the phone to the “Genius Bar”:http://www.apple.com/retail/geniusbar/ and have it replaced.)

How to fix it:

You need a cotton swab, scissors and rubbing alcohol. If you’re not comfortable sticking a wet cotten swab into your headphone jack, you should probably skip the rubbing alcohol. I used it and it worked fine for me. A cotton swab is too thick on the tip to fit into the headphone jack, and you don’t want to run the risk of leaving errant cotton threads inside your phone. Use the scissors to cut the cotton swab in half. Dampen the cut edge of one of the halves and use this end to clean out the headphone jack of your iPhone. You’ll probably be surprised at how much grime (relatively) you’ll clean out. 

You should be able to tell immediately if it worked because the volume control will no longer have the word “headphones” on the volume display, but make a call anyway and see if you can hear anything through the built in ear piece.

This is not my trick. I found it many moons ago during the first (abortive) attempt to fix this problem. Many relevant articles exist on the ‘net that discuss the technique I used of which, this message thread is an example.