I'm just back from my local Apple Store in the UK having seen them about my iPhone 5 with a faulty sleep/wake/power button. The Apple guy ran some diagnostic tests and confirmed that it was a hardware fault. Also, he confirmed that it was outside the standard 12-month warranty. HOWEVER, he immediately went on to explain why I'd get a FREE replacement! His comments were as follows:
1) Under EU law, the iPhone is covered by a 2-year warranty.
2) Strictly speaking the onus is on the consumer to prove the nature of the fault after 6 months, but Apple are waiving this requirement.
3) The extra warranty is with the SELLER, not the manufacturer, so Apple will replace faulty iPhones sold directly by them, not those sold by other suppliers. Other suppliers should be operating under the same rules and so it's worth seeing if they'll do replacements as well.
I bought my iPhone from Apple, so they are the seller in my case, which is why they replaced my phone free-of-charge. The replacement has a 90-day warranty.
One thing that can worry the customer is the fact that you have to sign a Work Sheet authorising the repair which carries a price of £174.17 + VAT, i.e. a total repair cost of £209! The Apple guy immediately pointed out that this is an internal cost to Apple, it is NOT a bill and the customer should not worry about or respond to the email confirmation of the Work Sheet, it's simply a record of the warranty claim!
So, Apple did the right thing and honoured the extra warranty period provided within the EU, with no fuss or arguments. However, the Apple guy confirmed that the iPhone 5 is suffering a higher failure rate for the sleep/wake button than the other models.