Apple seems to be taking responsibility for well reported iPod nano problems involving cracked screens. The company announced on Wednesday
that all defective nanos will be replaced free of charge. Coincidentally, Merrill Lynch downgraded its ratings from “buy” to “neutral”
expressing concern that Apple's earnings might be under
some pressure. Replacing defective units is not cheap. Also, iPod
sales account for nearly one-third of the company’s total revenue. The minis, which are being replaced by the nanos, are the strongest selling segement of the iPod family. So this is a very serious issue for Apple.
An Apple official exaplained,
"It is a real, but minor issue involving vendor quality problems. Any user with a defective screen should contact Apple ... and we will replace it for free. It's not a design issue."
This is the risk with Apple. Their hardware products are cutting edge and they push the envelope on the engineering side to provide the great design they offer. However, every now and then you have to deal with issues like this. Personally, I purchased one of the early iMac G5 and was struck by the power supply issue. Stuffing all that stuff into a sleak box with IBM's overheated G5 is bound to cause problems. As with the nano, Apple took care of this gratis.
As long as Apple is quick to fix the problem, and makes it easy for consumers to replace the defective nanos they've already purchased I do not anticipate any long term problems for Apple. The nano is just too hot to not be a huge success. Apple would have to work hard and do some very stupid things to screw this up.