@athynz
Well if they didn't know it proves that Apple don't test their products properly, possibly because secrecy is more important than quality..
I'm sure they knew, but only when they were so far down the development/manufacturing process that it was too late to change without taking a serious financial hit (and maybe delay launch). Instead they chose to rely on their customers being convinced that even the most crappy product is the best in the world because it is shiny....
I've had an iPhone 3G for a couple of years, and I love it. It's the best phone I've ever had, but I think I'll pass on the iFlop 4..
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