Lawsuit Claims Apple Knew Nanos Would Scratch

Apple (Nasdaq: AAPL) has been hit by another class-action lawsuit, this one claiming that the iPod maker knew when it released its iPod nanos that the devices' screens would scratch very easily. The nanos were released last month as a replacement for Apple's popular iPod mini.

Previously, Apple settled another class action suit in June by agreeing to give US$50 vouchers and extended warranties to customers who had problems with the batteries in older model iPods.

The current suit, filed Oct. 19 in U.S. District Court in San Jose, Calif., states that a thinner coating of plastic resin on the nano screens makes them more susceptible to scratching than other iPods. The screens quickly become impossible to read, the suit says.

Cracking, Not Scratching

When complaints began to surface shortly after Apple released the nano last month, the company admitted to having problems with a supplier that led to screens cracking too easily. The problem affected less than "one-tenth of one percent" of nanos, one Apple spokesman said. The company did not admit to any scratching problem.

Rob Enderle, principal analyst with the Enderle Group, told MacNewsWorld that the black screen on the nano makes scratches more visible. He said there are several design changes Apple could make to resolve the issue, if consumer claims are found to be true. They include using scratch-resistant glass, adding a flip-up cover or putting a lip around the screen so it doesn't rub against surfaces as easily.

Analysts said they don't believe the lawsuit will affect iPod sales, but the company's Teflon image itself may scratch over time.

"Part of what Apple's got to struggle with here is a credibility problem," Enderle said. "Over and over, Apple is being sued for saying one thing and another is true. The danger is that they will damage the trust their customers have [with them]. So far, that message hasn't resonated, because the public is willing to accept shortcomings in exchange for having a really cool product. It does create a risk, however."

Minimal Impact

Brand strategist William Arruda, of Reach, a "personal branding company," agrees that the lawsuit is unlikely to damage Apple's image.

"Apple's brand is about being different, not about building scratch-resistant products," Arruda told MacNewsWorld. "The nano, though tainted by this lawsuit, is consistent with the brand promise, 'Think different.' I think the lawsuit will have minimal impact on the Apple brand overall, unless they do something egregious during the process that alienates their loyal brand ambassadors."

Apple stands to lose only if a strong competitor appears to challenge it, a scenario Enderle said he is surprised hasn't happened yet.

"This opens an opportunity for a competitor. So far, iPod still stands alone. There's no vendor that can take advantage of these problems, but that won't last forever. Then a mistake will do damage to Apple," he said.

The lawsuit was filed by law firm Hagens Berman Sobol Shapiro LLP, naming Jason Tomczak as plaintiff.