A while back I dropped my Iphone and seriously cracked the screen. As I had enough points to get another one for free so I put this aside and got new one for free. In the meanwhile I asked my local operator a quote for a repair - €450 - €550! (It's a 32Gb). Anyway it collected dust for a couple of weeks before I heard of a company in the UK that does Iphone repairs.
The company : iPhone Repairs & Spares LTD - iphone repairs iphone spares iphone parts repair iphone iphone screen repairs iphone 4 repairs iphone-repairs fix my iphone touchscreen best iphone repair company repair my iphone fix my iphone screen iphone 4 repairs UK changed the screen, fixed the broken jack and sent it back for £117 and now it's good as new. They are relatively quick and no hassles so I can highly reccomend them. Apparently if a iphone has been dropped in the water more often than not it can be repaired.
As for Apple I don't think they are interested in repairs but replace old units with newer ones at a cost.
Now I've got two iphones! Will give the other ones to my mrs, will keep her happy