Apple Inc. (AAPL) iPhone 4 and Its $5M Defect?

Apple Inc. (NASDAQ:AAPL) has certainly been developing its share of devices over the last few years, and while every company desires to be perfect in production, the truth is they’re not. Defects are part of the system and many times, the reputation of a company can be determined by the frequency of the defects in one sense, but also how the company handles defects when they are known by the company.

Apple Inc. (AAPL) to be Added to Several WisdomTree ETFsAnd apparently, the reputation of Apple Inc. (NASDAQ:AAPL) is at stake involving a device that first went on the market three years ago. A class of iPhone 4 users has filed a $5 million lawsuit  not so much over a defect involving  the phone’s power button, but because the class claims that Apple knew about the defect and did not acknowledge it until after the warranty expired. Thus, when users would go to an Apple Store to have it fixed, it would cost the customer nearly $150 to have the problem resolved.

Image: Apple Inc. (NASDAQ:AAPL)

The class-action was first brought forth by Debra Hilton of Florida, who bought an iPhone 4 and noticed that the defective power button would not allow her to lock the phone or to shut off the power. She claimed – and ultimately claimed by others in the class – that Apple corporate knew about a problem with the phone’s flex cable that controls the button, but did nothing about it or acknowledge the existence of the defect until more than a year later.

Hudson apparently is using a YouTube video and some posts on Apple’s forums as evidence that customers complained about the power button on the iPhone 4 and that a video surfaced showing how to repair it. There was more evidence presented by an iPhone “repairman” (there is no connection to Apple that we’re aware of) who says that the power-button defect is a common one on the iPhone 4.

As is typical practice for most companies, Apple Inc. (NASDAQ:AAPL) has no comment on the lawsuit at this point, as the filing was made just this week. The class, which is an unknown number of customers, is seeking damages of about $5 million, according to the filing.

What do you think about this lawsuit? Is there much of a case against Apple Inc. (NASDAQ:AAPL) in this regard? If this is successful, could imperfection lead to further damages for companies in the future? Let us know your thoughts in the comments section below.

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