iphone-3gs

After failing to honor iPhone and iPod touch warranties, Apple has agreed to pay out $53 million to settle a class action lawsuit. Thousands of people could potentially be eligible for the payout; the issue stems from Apple's unwillingness to replace or fix faulty phones that fell under the company's one-year standard warranty.

According to the class action suit, Apple refused to honor warranties no matter the problem if the device's indicator tape, which is tucked inside near the headphone or charging ports, turned red or pink. However, 3M, the tape's maker, said that humidity could have caused the tape to change color, and not water.

In typical Apple fashion, the company has admitted no wrongdoing, though chief litigation counsel Noreen Krall signed the agreement on Wednesday. In some cases, payouts can be around $200—affected devices include the first iPhone, iPhone 3G, iPhone 3GS and the first, second and third-generation iPod touch.