Apple's got a lot of problems when it comes to overheating iPod batteries -- not only is the situation potentially dangerous, every move Cupertino makes is subject to sensational misinterpretation. Take today's Times UK story this morning about 11-year-old Ellie Stanborough, whose iPod touch blew itself up last month: when her father Ken contacted Apple for a refund, it seems he got a little bit of a runaround, but was eventually sent a settlement agreement offering a full refund if the family agreed to keep the deal confidential. That's actually totally standard practice when companies settle out-of-warranty claims, but since the agreement was written by lawyers, it contained a bunch of vaguely threatening language about how breaking confidentiality might result in Apple relentlessly suing everyone until Liverpool itself goes bankrupt and the populace is forced to resort to cannibalism and network television. Cue hysterical media coverage.

Now, it's no secret that lithium-ion batteries like those used in the iPod have a long history of overheating and exploding, and Apple's certainly had large-scale problems with defective cells -- the first-gen iPod nano has been recalled in Korea and Japan, for example. It's also obvious that the sheer number of iPods sold means there are more exploding iPods than anything else -- and while we're sure some accountant at Apple has a spreadsheet showing the exact failure rate is acceptable, all we've got right now is story after story of these things blowing up with zero context. So here's our suggestion to Apple: maybe instead of having lawyers draft individual settlement agreements full of impenetrable and scary legalese for each and every jilted iPod owner out there, why not simply fess up to the problem, let people know exactly how common it is and how to avoid it, and provide a dead-simple replacement option for people who've had their iPods go up in smoke? That would put everyone at ease, and make these types of stories much less likely to blow up in a media feeding frenzy. Or, you know, do nothing because overwhelming market share inevitably leads to arrogant laziness -- your call.

[Via TUAW]

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Exploding iPod blows up in Apple's face