Foxconn hasn't exactly been helping itself much lately in the sad case of an employee of the company who committed suicide after apparently misplacing an iPhone prototype, with it first noting that the worker had a history of misplacing such prototypes, and then going on to offer his family a rather meager compensation of $44,000 and a free Apple laptop. It now looks to be trying to improve things somewhat, however, with a Foxconn official saying that the company has now agreed to pay Sun Danyong's parents 360,000 yuan (or about $52,600) in compensation up front, plus an additional 30,000 yuan (or $4,385) every year thereafter. Of course, that official is speaking on the condition of anonymity, so things could still well change, and it goes without saying that this likely won't be the last we hear of this story.

Reports have circulated the internet that a 25-year old worker at Chinese manufacturer Foxconn, which produces all the iPhone models for Apple, committed suicide last week following revelation that a fourth-generation iPhone prototype, one of the 16 iPhones he was responsible for, had gone missing. Some stories circulating have described illegal searches of the man's apartment and interrogation involving physical abuse by other Foxconn employees. While not confirming the case being a suicide or the cause being the disappearing device, a spokesperson for the Cupertino-based company did release a statement corroborating the news of his death, saying that it is "saddened by the tragic loss of this young employee, and we are awaiting results of the investigations into his death. We require our suppliers to treat all workers with dignity and respect." The status of the missing iPhone prototype, which may or may not have been one that earlier this month found itself on eBay given the timeframe (although a 3GS model and not "fourth generation") remains unknown. Our hearts go out to all involved.

Read - Statement form Apple
Read - iPhone prototype goes missing; Chinese worker investigated, commits suicide

Okay, so we'll go ahead and crush a few dreams up front -- there's nothing here that proves this isn't some funky KIRF iPhone or just an ad hoc or jailbroken app making things look completely funkadelic. Now that our skepticism is out in the open, we'll be honest and say we really, really hope this is legitimate. According to the eBay description, this here iPhone prototype was constructed a few months prior to the real iPhone's release, and it actually powers on, makes calls and receives SMSs. It sports a totally beta plastic matte screen, and the software is obviously pre-release. Oh, and the best part? The auction winner also scores a second beta phone that won't turn on (yet), but we're sure the right tweaker could fix it up into the most amazing secondary phone the world has ever seen. Forget all that bad economic news you've been hearing -- you best bring the bring the bank if you're thinking seriously about claiming this.

[Via iLounge]