You might imagine the people behind Apple would be satisfied with their yearly turnover, after all, in 2019 Apple Inc. (AAPL) became the world’s first company to record market capitalisation of $1 trillion. However, you’d be wrong.
After a class action testified that the organisation released software, which intentionally slowed down older models of iPhones, Apple has finally accepted a preliminary settlement of $500 million.
The trial chronicles back to December 2017, when Apple confirmed a long-held suspicion among phone owners. They admitted that to push sales for newer models and batteries, the corporation had deployed software that deliberately slowed down some iPhones as they got older.
Apple argued that as batteries aged, their performance deteriorated and the frustrating “slowdown” experienced by users called “throttling”, was designed to lengthen the phones’ lifespan. Users on Reddit further fanned the flames of this debate, when members struck up a fiery dialogue and began to suggest a correlation between ageing iPhone batteries and decreased performance.
Critics considered this proof of “planned obsolescence” – a practice used by manufacturers to deliberately impair older products; prompting users to buy a new model.
Apple customers complained that following the installation of new software updates their phone performance slowed down dramatically. They contested that this was a deliberate tactic designed to encourage consumers to upgrade to newer models or install fresh batteries needlessly.
Lawyers for Apple argued that the problems were mainly due to high usage, changes in temperature and other issues. They stated that its engineers endeavoured to address these issues as quickly as possible.
The proposed settlement comes with some stipulations. The settlement price has a floor of $310 million, though it can reach as high as $500 million. Moreover, the “settlement class” doesn’t include all iPhones; it involves all former or current US owners of iPhone 6, 6 Plus, 6s Plus, 7, 7 Plus, and iPhone SE. These devices must explicitly run on iOS 10.2.1 or later, or iOS 11.2 for 7 and 7 Plus. This is as long as installation of these versions of iOS occurred before December 21, 2017.
Each claimant qualifies for $25 per iPhone. However, that $25 settlement payment per person could decrease if the number of claims surpasses the maximum class settlement amount. Alternatively, it could rise should fewer people step forward.
Moreover, as it’s still a preliminary proposal, there’s also no real way to file a claim yet. US federal judge Edward J. Davila is set to approve the proposed settlement on April 3 2020, at which point the agreement will go into motion.