An iPhone is considered a consumer accessory in the Apple sphere - disposable component style product, same with the iPod range and the iPad.
Where there are multiple components that can have faults isolated to them, then they will replace these components to enable a fix. After 3 significant parts failure you would be setting yourself up for a replacement unit.
As for Dead on Arrival (DOA), the machine that does not start up out of the box, Apple policy allow a 14 day window for replacement - but this is a bit of a hit and miss affair, and more often than not people want to use their machines that they have custom configured and waited 3-5 weeks for and not wait for a new one to be built (read here the parallels with a car) - and take the repair option - however if it is a stock unit I encourage customers to take a replacement.
In this situation, I think the owner with the issue will handle it to whatever he feels is an appropriate resolve. If he wants a new car, well all the best to him in getting one. I don't think that ACCC have too much of a case in this as the dealer is attempting to resolve the issue - and the DOA policy is not governed by ACCC or any regulator, but the company that manufactures the item.
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