Yeah, product recalls are typically about safety issues. Like... the airbag might shoot shrapnel into my face. Or how Samsung recalled their phones that were catching on fire. Your touchscreen not working isn't likely to endanger your life

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Very much varies by your state/country. You're right that there is an implied warranty of merchantability, but many states allow merchants to disclaim this, and Apple does just that:
"TO THE EXTENT PERMITTED BY LAW, THIS WARRANTY AND THE REMEDIES SET FORTH ARE EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES, REMEDIES AND CONDITIONS, WHETHER ORAL, WRITTEN, STATUTORY, EXPRESS OR IMPLIED. APPLE DISCLAIMS ALL STATUTORY AND IMPLIED WARRANTIES, INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND WARRANTIES AGAINST HIDDEN OR LATENT DEFECTS, TO THE EXTENT PERMITTED BY LAW. IN SO FAR AS SUCH WARRANTIES CANNOT BE DISCLAIMED, APPLE LIMITS THE DURATION AND REMEDIES OF SUCH WARRANTIES TO THE DURATION OF THIS EXPRESS WARRANTY AND, AT APPLE'S OPTION, THE REPAIR OR REPLACEMENT SERVICES DESCRIBED BELOW. SOME STATES (COUNTRIES AND PROVINCES) DO NOT ALLOW LIMITATIONS ON HOW LONG AN IMPLIED WARRANTY (OR CONDITION) MAY LAST, SO THE LIMITATION DESCRIBED ABOVE MAY NOT APPLY TO YOU."
The caps aren't me shouting, I just cut and pasted from the Apple iPhone warranty, and they wrote that paragraph in all caps (to make sure they could say people must have seen it?). So, while perhaps unconscionable, it is exactly the route Apple has taken. Maybe I'm cynical, but when I buy a product I never expect it to last longer than the warranty, and if it does I feel like I'm on golden time

If it's a major purchase, like a car, I will extend the warranty to cover the same time as I am financing it for. I never extend electronics warranties, but in the same light I don't expect the manufacturer to help me out if my out-of-warranty product stops working.