ifoAppleStore reports that Apple is now offering the opportunity for users with water-damaged iPhones to swap their units for working refurbished units for a fee of $199.
The new policy applies to out-of-warranty incidents that would normally require the purchase of a new phone, and also trigger an extention of the owners two-year AT&T contract. Under the new policy, the iPhone owner simply pays a one-time $199 price for a refurbished handset, and transfers the SIM card to the new device.
The report speculates that the policy change may be a means of allowing Apple to clear stock of refurbished iPhones ahead of a rumored summer launch of a new model, although it may simply be a general easing of Apple's repair policies.