Apple Settles iPhone Warranty Case for $53 Million

The settlement will end a lawsuit brought by device owners with water damage.

Apple has agreed to settle a class action lawsuit brought by iPhone and iPod Touch owners for $53 million. The device owners sued after Apple failed to honor its warranty because the company said the devices had been submerged in water.

According to Wired's David Kravets, "Apple is agreeing to pay $53 million to settle a class action accusing the company of failing to honor warranties on iPhones and iPod Touches, according to an agreement obtained today by Wired. The settlement, (.pdf) set to be filed in a San Francisco federal court in the coming weeks, provides cash payouts to potentially hundreds of thousands of iPhone and iPod Touch consumers who found Apple unwilling to repair or replace their faulty phones under Apple’s one-year standard, or a two-year extended, warranty. Apple chief litigation counsel Noreen Krall signed the agreement Wednesday. Apple admits no wrongdoing in the settlement, which needs a judge’s approval."

Cult of Mac's Killian Bell explained, "The lawsuits alleged that Apple refused to honor warranties on iPhone and iPod touches — no matter what the problem — if the white indicator tape embedded within them had turned red or pink, indicating that they may have been subjected to liquid damage. However, the tape’s manufacturer, 3M, has said that humidity and not water contact could have caused the color change."

The Mac Observer's Jeff Gamet noted, "While Apple has said the small sensor strips shouldn't be triggered by humidity or sudden temperature changes, in some cases it seems that's exactly what happened. As a result, it appeared as if those iPhones had suffered actual water damage when instead the moisture sensor strips had simply collected enough condensation from humid air to cause them to change color. Gradual temperature changes in more humid environments most likely weren't issues, but when combined with the sudden temperature change that comes with leaving an airconditioned building, that may have been enough to cause the sensors to falsely indicate water damage."

PCMag's Chloe Albanesius added, "How much money people actually get depends upon how many customers sign on to receive a payout. The case covers the original iPhone, the iPhone 3G, and iPhone 3GS, as well as the first-, second-, and third-generation iPod touch. Those gadgets are worth $105 - $300, according to a chart in the court filing, but class members cannot receive more than 200 percent of the amount their gadget is worth. So, if you had a 16GB iPhone, which is worth $300 according to the filing, the most you could take home is $600. Again, however, if a large group of people sign up for a payout, that amount could dwindle significantly."

Tags: iPhone, Apple, lawsuit, ipod touch, class action, settlement, warranty

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