Apple faces lawsuit over iPhone debacle

APPLE, which is facing a slew of lawsuits over its admission that it slowed iPhones, may also slash its sales forecast for its new iPhone X.

Apple defrauded iPhone users by slowing devices without warning to compensate for poor battery performance, eight lawsuits filed in various federal courts in the week since the company opened up about the year-old software change.

The tweak may have led iPhone owners to misguided attempts to resolve issues over the past year, the lawsuits contend.

All the lawsuits – filed in US District Courts in California, New York and Illinois – seek class action to represent potentially millions of iPhone owners nationwide.

A similar case was lodged in an Israeli court on Monday, the newspaper Haaretz reported.

Apple did not respond to an e-mail seeking comment on the filings.

Shares in Apple and several of its Asian suppliers fell on Tuesday, after a report by Taiwan’s Economic Daily and comments from some analysts suggested iPhone X demand could come in below expectations during the first quarter.

Apple will slash its sales forecast for the iPhone X in the quarter to 30-million units, the newspaper said on Monday, citing unidentified sources, down from what it said was an initial plan of 50million units.

An Apple spokeswoman said the company did not comment on market rumours.

Shares of Apple surged 45% this year before the iPhone X launch as investors anticipated interest from iPhone users who had gone years since buying a new one.

But financial analysts have mixed views on whether such demand has materialised for the premium device, which features an edge-to-edge display and facial recognition unlock the phone.

Shares of Apple have edged slightly lower since the iPhone X debut. They fell 2.5% to $170.57 on Tuesday.

The company acknowledged last week for the first time in detail that operating system updates released since “last year” for the iPhone 6, iPhone 6s, iPhone SE and iPhone 7 included a feature “to smooth out” power supply from batteries that are cold, old or low on charge.

Phones without the adjustment would shut down abruptly because of a precaution designed to prevent components from getting fried, Apple said.

The disclosure followed a December 18 analysis by Primate Labs, which develops an iPhone performance measuring app, that identified blips in processing speed and concluded that a software change had to be behind them.

One of the lawsuits, filed on Thursday technology to in San Francisco, said that “the batteries’ inability to handle the demand created by processor speeds” without the software patch was a defect.

“Rather than curing the battery defect by providing a free battery replacement for all affected iPhones, Apple sought to mask the battery defect,” according to the complaint.

The plaintiff in that case is represented by attorney Jeffrey Fazio, who represented plaintiffs in a $53-million (R659.3-million) settlement with Apple in 2013 over its handling of iPhone warranty claims.

Users over the past year could have blamed an ageing computer processor for app crashes and sluggish performance – and chosen to buy a new phone – when the true cause may have been a weak battery that could have been replaced for a fraction of the cost, some of the lawsuits state.

“If it turns out that consumers would have replaced their battery instead of buying new iPhones had they known the true nature of Apple’s upgrades, you might start to have a better case for some sort of misrepresentation or fraud,” said Rory Van Loo, a Boston University professor specializing in consumer technology law.

But Chris Hoofnagle, faculty director for the Berkeley Center for Law & Technology, said in an e-mail that Apple may not have done wrong.

“We still haven’t come to consumer protection norms around ageing products,” Hoofnagle said.

Pointing to a device with a security flaw as an example, he said: “The ethical approach could include degrading or even disabling functionality.”

The lawsuits seek unspecified damages in addition to, in some cases, reimbursement. A couple of the complaints seek court orders barring Apple from throttling iPhone computer speeds or requiring notification in future instances. — Reuters