Also a 5% failure rate in the first 2 years is not extremely bad or anything, a lot of electronics and reputable brands do worse than that.
This is too generous or the expectation is too low.
Also 5% would be very high. 1-2% is a much more normal failure rate
This is more in line reality, but still high for a good product.
Electronics return rate can be like 5%. This is different than defect rate. Return can be due to consumer just changing their mind or not liking the product.
The random component level failure rates are anywhere from 1 to 100 defects per million. Then you might have 10-100 components that make up electronics products. Any of the components can fail. So that is OR (in statistics or mathematics), which is an addition.
So assuming really bad quality across the board for all components, 100 defects per million per component x 100 components in a system = 10000 per million for the system, which is 1% failure. In reality, system failure rates are lower than this because not have every single component have this high defect rate.
This assumes random defect. That means there is no design flaw or systematic manufacturing issue. When there are design flaws and system problems, then failure can be higher. In reality, you have a mix of random and system failures.
Defect rates can be broken down further. The defect rates vary with production volume. When components are mass produced over many years, issues are found and fixed. ICs (D/A, Op Amp, Mux) and discrete components (transistors, resistors, capacitors) are mass produced. These have low failures. On the other hand, lower volume manufacturing processes that are unique to each electronic device can have higher failure rates. That is design of the circuit (PCB), manufacturing of PCB, assembly, enclosure, switches, cables, etc.
Lastly, often the issue is not just random defect, but on the standards set up or accepted by the electronics company. Tighter tolerance, increase screening, and increased rejects all end up as cost; which translate to higher product pricing.