High schooler makes $130K off white iPhone 4 parts, sparks legal action

Fei Lam, a 17 year-old high school student, capitalized on the white iPhone 4 frenzy by selling a conversion kit to transform a standard black model into the coveted white iPhone. The teenager’s business took off when he was featured on CNN, CNET, and TechCrunch and the lad amassed a respectable $130,000 in a mere six months. The majority of the funds will be used to pay for Lam’s college tuition so he can study computer science or business. Sounds like the work of an forward-thinking young man who is rewarded for his hard work, no?

Every rose has its thorn and this feel good story is marred by a threat of legal action against the teenager. A private investigator, presumably with ties to Apple, sent a letter accusing Lam of receiving and selling stolen goods. This private investigator is reportedly part of a anti-counterfeit/trademark firm and may be the same company that is responsible for shutting down white iPhone auctions on eBay.

Now facing legal action, Lam denies any wrongdoing and claims that he is 100% sure the goods are not stolen, but this is where the story gets muddied. The parts that Lam is using are indirectly obtained from Foxconn, the Chinese manufacturing company that assembles the iPhone on behalf of Apple. Lam reportedly knows someone who knows someone inside of Foxconn and he has been able to obtain a supply of white iPhone 4 parts directly form the source. At first, the parts were shipped to him and he re-shipped them to his customers. As his business grew, he arranged for the parts to be direct-shipped from China.

If the parts are being siphoned out of Foxconn, then they may be the property of Apple and Lam, naive or not, may be receiving stolen goods. Of course, it is also possible that these parts are being lifted from a stockpile headed to or even in the dumpster. Apple has reportedly struggled with the tinting for the white iPhone 4 and may have amassed a large quantity of rejects. Is it still theft if Lam’s source is dumpster diving for these parts and not pulling them from the production line?

Lam is committed to his business and will continue selling his white iPhone kits, despite this looming threat of legal action. He points to other sellers who are offering similar white iPhone kits and remains undeterred. We assume, of course, that some of his $130K in profits are being used to retain a lawyer, just in case.