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Apple to pay $53 million in iPhone water damage lawsuit

Apple has settled a class-action lawsuit over its liquid damage policy in iPhone and iPod warranties.

The Cupertino-based company employed a liquid indicator in its devices, which changed colour if it came in contact with water. This was designed to ascertain if an iPhone had been submerged, which would void the warranty.

However, customers complained that the indicator, made by 3M, could change colour from moisture or humidity experienced during normal use. Thousands of iPhone users were refused warranty coverage on this basis.

While Apple disagreed with the claims, it eventually agreed to pay $53 million (£35 million), which will be shared by the estimated 153,000 people affected by the issue. Lawyers said the damages could have ranged from $31.2 million (£21 million) to $147 million (£98 million), according to the Wall Street Journal, making the settlement on the lower scale of things.

Apple's warranties have been the cause of intense criticism in China, where the company faced accusations that it was giving Chinese customers inferior warranty terms, often simply repairing damaged phones rather than offering replacements, as it does elsewhere. After extensive media coverage, Apple's CEO Tim Cook apologised to consumers in China and promised to change the company's policies there.

At the time of writing, Apple's shares are down $3.71 (£2.46), or 0.83 per cent, to $441.44 (£292.93).