[pfranz]

That wouldn't be any different from now or what they do with laptops.

For laptops, as part of their hardware test they had a chart for the battery. The expected cycle count was listed in quite a few places (it was 200 for removable batteries and jumped to 1000 when they started making them non-removable). X was the cycle count and Y was the battery's maximum charge (I tried to find pics, but couldn't). The chart had a diagonal red line marked "defective." They replaced your battery if it was within the defective range, but not if your cycle count was too high.

Phones aren't any different, they're just more hand-wavy about the battery (they don't show or mention cycle-counts).