High-schooler Fei "Phil" Lam started a business during his senior year of high school--and it's already pulling in six figures. Lam's stroke of genius was in recognizing that most every Apple fanboy was eagerly awaiting the white iPhone 4. So he founded WhiteiPhone4Now.com, a site offering conversion kits for giving a black iPhone a white makeover. Since starting the site, Lam has sold as much as $130,000 in parts, and is now worrying about possible legal ramifications for his success.
We spoke with the Queens, NY resident about his connections to Chinese iPhone manufacturer Foxconn, trademark infringement, and the private investigator threatening a criminal investigation.
Fast Company: Describe how you contacted your supplier. Does he work at Foxconn?
Fei "Phil" Lam: Foxconn is not responsible for making the parts. They just assemble parts sourced from other companies like Toshiba, but according to my guy, some parts are from Foxconn. Don't know which. He does not work at Foxconn anymore. He did in the past. He has friends in Foxconn. I didn’t know that until months later. I'm still a bit murky on how the parts are OEM, but I no longer can label them as OEM. I'm not sure if he went to Foxconn to get the assembled parts cause from what I've heard, another company does that. Like I said, I'm still not 100% sure what goes on. These parts are difficult to get, but there are hundreds of others selling repair or replacement parts online. It's been available for a while. I was just the first to put them together as a kit and advertise them as "convert your iPhone 4 to white."
How did you contact your supplier?
To be honest, if you have an Apple-related blog, you will get spammed with these people selling replacement parts. I got so many and thought, why not reply to one?
You know your supplier from a spam message?
I guess that would be right.
You responded to a random spam message and connected with someone in China?
For sure. It was that simple.
Seems somewhat dangerous. Weren’t you worried it might be a scam?
Dangerous, sure. But no problem so far.
So you contacted him by email and phone. The plan was to buy these parts from him and have him ship them to you?
Until some point, yes.
Where did you think he was getting the parts from?
I guess the same way everyone else gets them.
You’ve since been contacted by a private investigator. Are you concerned?
Nothing is stolen. That's why I was confused when the PI said I was selling stolen parts. How would he know who my suppliers are? Why didn’t he question the other sellers?
Are you concerned you might’ve been buying stolen goods?
My supplier explained that they are not stolen. If they were, he would have booked it when I brought it up, and taken my money.
Who do you think hired the private investigator? Apple?
Are you worried about trademark infringement?
That I'm selling trademarked goods? If I sold an iPhone 4, does that count the same?
Or counterfeit goods.
Like I mentioned in The Observer article, I don't know the law. I've had a few lawyers email me saying what I'm doing is completely legal.
It just seems that the parts are exact duplicates of Apple products, imported from China, and indeed at times, from the same factory as Apple's parts. The parts have Apple's logo and Apple's trademark. Are you certain this is entirely legal?
Here’s a site that sells them: directfix.com.
Are they selling white iPhone 4 parts with the same logo?
Don't know about the quality, but all these parts have the logo. Iresq.com is an authorized Apple repair center, and they sell the same parts.
Are you an authorized Apple repair center?
No, but what I'm saying is that I guess that would knock out the counterfeit or trademark issue.
So because another website sells similar products, it makes it legal?
I know I sound like a brat with that, but not my intention.
No, not at all. I realize that you are in a unique situation, where you made a successful business, but are unsure of the legal ramifications.
Is WhiteiPhone4Now.com your first company?
I don't consider it a company.
But you're making tens of thousands of dollars.
Not a legal company, as in not incorporated.
Your first business?
I’d like to ask a question. It seems you’re being very careful with your wording: that this is not a company, or a business; that your supplier said the parts were not stolen goods; that you don’t know the law; that other sites sell similar goods. Is there a reason for this?
Not really--that's just the truth. I didn't realize I was being careful. I've not gotten any advice on what to say.
I understand you have plans for a startup?
It's going to be a Web app. I’m trying to stay stealthy with the details, but it will be a super-simplistic way to connect with people online. It will have elements of a social network.
How far do you see WhiteiPhone4Now.com going? At this pace, your profits are sure to increase. Do you become more nervous about potential legal consequences, the more the site makes money? What if you made $1 million?
I doubt I’d make a million, but I will know [how far this is going] in the coming days, as I get real legal advice. Until Apple releases the white iPhone 4 or if I find out what I’m doing is illegal.