Exclusive Q&A: How the White iPhone 4 Kid Got Rich Buying Genuine Apple Parts Via Spam

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?

Hopefully not.

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.

For sure.

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?

Could be.

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.

Earlier: Teen Selling White iPhone 4 Parts Talks Apple, Big Earnings, Foxconn Supplier, Legal Fears

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  • Chris Reich

    "Respect" is certainly not a word I would use. We now have a business culture nearly void of ethics and this doesn't bode well for the next generation. Should we abandon all the rules and toss aside all morality in business? Should we applaud the making of money regardless of the means?

    Mr. Lam is not alone. Take a look at Ebay. Items selling for $30 at Best Buy can be had directly from the China plant by means of employees for $3. (Sony ear buds)

    Chris Reich

  • kurt campher

    I respect this kid for recognizing an opportunity and taking advantage of it. I'm not sure about his legal issues but instead of waiting around for something to happen he took the initiative. Good luck Phil!!!!

  • Chris Reich

    US companies that locate all manufacturing in China deserve a kick in the wallet. Apple gets no pity from me on this but I do hope they pursue the matter in court. I hope the legal fees are huge enough for them to consider making a few things in the U.S. I hope they win their case too.

    As for Fei Lam? I don't want to read some happy ending story a couple months from now about how Apple hired this thief for his creative genius. Prosecute. Jail? No, we're not fascist. Fine the hell out of him.

    Economic competition and violation of patent and trademark laws are no joke. The American people need to wake up to the fact that we are in direct competition with China and it's not a friendly game of monopoly. This is serious stuff.

    As the United States runs up trillion dollar annual deficits and unemployment continues to rise, consider the consequences to the future generations of American workers. Do you want your son or daughter to work for $7 at a call center for a Chinese company?

    I know this isn't popular. I know we're supposed to buy the line from "economists" about how it makes sense for us to supply the know-how and China the labor. One big happy world. But economists never get the picture right. I repeat, this isn't a game. China is building a strong navy to protect China's access to resources.

    I know we're supposed to be anti-union because big labor has driven companies out of the U.S. To that I say, nonsense. Greed lured them out just as greed stung Wall Street. Costs are going up because the dollar is worth less. Don't blame the retired guy who spent 30 years working at a GM plant and was promised a pension.

    It's time to revive ethics in this country. We need to teach ethics in school, talk about it in business and demand it from our public servants.

    Chris Reich