Independent warranty provider SquareTrade has released a study of more than 30,000 notebooks tracked through its extended warranty plans—and the results are a little surprising. Computer makers Asus and Toshiba led the pack in terms of notebook system reliability, with fewer than 10 percent of their systems needing repair after two years, with three-year failure rate projections of about 15.6 and 15.7 percent (respectively). And who’s in last place? Top computer maker Hewlett-Packard, with more than 15 percent of its systems failing after two years, and a three-year projection forecasting over a quarter of them will fail in three years.

But the experience taught Kaplan and Braunstein a lesson: Customers would sacrifice lots of quality for a cheap, convenient device. To keep the price down, Pure Digital had made significant trade-offs. It used inexpensive lenses and other components and limited the number of image-processing chips. The pictures were OK but not great. Yet Pure Digital sold 3 million cameras anyway.