This post sums it up nicely as far as I'm concerned.
Of course (before you criticise) it doesn't particularly address screen cracking per se (it concentrates on scratches etc). But I think we have to accept Apple's explanation so far. Based on 6m iPod's shipping per quarter (at the last count), they would probably have shipped AT LEAST 1m nano's in the first month. So even 1,000 screen failures would represent 1 in 1,000 (1/10 of 1% in fact). Assuming the failures happen early in the life of course!
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