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Heh. I wonder if he could have saved my wife's 3Gs, after it went through a cycle in the washing machine (nestled in the pocket of her bath robe).
We still have it, though it's as dead as a doorstop.
I suspect his business may take a hit, if not go down the toilet, as Apple Care Plus covers accidental and liquid damage, for $99. There's a $49 deductible, so you can damage it twice, for essentially the same price, and get Apple certified repairs.
Why is there always money for war, but none for education?
That's how I was with my first gen iPhone. I use a case with my iPhone 4 though.
Regarding AppleCare+, I don't think it will bite into his business that much. Most people still don't get it and there are still millions and millions of iPhones out there.