The iPod nano is a hot product, and not in a good way: Apple has been ordered by a Japanese court to pay restitution to a couple whose first-generation iPod nano burst into flames. According to court documents, the device caught fire during charging, severely burning the wife's hands. Apple will pay the equivalent of $7,400 to the couple to make things right.
It has been known for some time that first-generation iPod nanos are prone to overheating. The older the iPod nano gets, the more likely the battery is to malfunction. It's certainly not common for iPod nanos to catch on fire — Apple calls the event "rare." Still, the idea that they can catch on fire in the first place should give you pause about using yours.
What should you do if you have a first-generation iPod nano? Well, for starters, stop using it. Apple has a replacement program in place where you can get a new iPod nano free of charge if you own one of the defective units manufactured and sold between September 2005 and December 2006. Simply visit Apple's iPod nano replacement page and enter the serial number from the back of the device. After giving Apple some basic information (your name; address), you'll be mailed a new, safer iPod nano. The process takes approximately six weeks.
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