Hacking The iPod: How I Earned $65K In High School | Hacker News Reader

Hacking The iPod: How I Earned $65K In High School

teddy.is

215 pointsted055 comments

I started to buy broken iPods that were still under warranty, mailing them back to Apple and receiving brand new refurbished iPods for the cost of shipping. This was the most lucrative venture of all but it was the primary reason why an Apple lawyer had called me that day. Understandably so, they did not like me taking advantage of their transferrable warranties. They knew that I was a kid and let me off the hook

I don't get it. If you were buying units still under warranty and Apple had transferable warranties then I'm not sure what they let you off the hook from. You were not doing anything wrong. It sounds more like just another dick move from Apple.

More like a dick move by him not telling them they could just get a new iPod.

how do you know it was a bad deal?

he was paying something for that broken ipod. those people would have to pay shipping and then sell their refurbished ipod, also at a loss since they do not have the volume he had to make a profit from used eletronic sales (last time you were able to sell a used consumer camera at a good price on craigslist?)

in the end, the profit for both parties may have been the same.

It could also be construed as an arbitrage opportunity vis-a-via the time value of money.

Obviously some parties to the transaction might be unaware that their device is still under warranty, but the OP is providing a valuable service allowing them to liquidate their broken iPod into immediate cash and avoiding the risk that the warranty might be void, as well as the delay between sending and receiving the repaired unit.

The OP didn't force the people to put their broken iPod on ebay, he's merely taking advantage of an existing offer.

I doubt many people would take the deal rather than get a new iPod if they knew all the facts.

Since the OP did not write about his interactions with these sellers it is hard to know if he did or did not inform them. But I don't believe the OP was obligated in any way to tell everyone about Apple's warranty terms... so I don't think not telling them was a "dick move". I can also think of plenty of reasons why a person might know all those facts and still choose to sell the broken, still-in-warranty iPod. One of them being that you don't get a new iPod... you get a refurbished iPod and some people just don't want someone else's used stuff. Other people may have already upgraded to a new/different model and no longer need the broken one replaced.

"Other people may have already upgraded to a new/different model and no longer need the broken one replaced."

That was usually the case. People often felt they were due for an upgrade anyway and wanted to simply part ways rather than dealing with the warranty process.

Most money in the world is made by exploiting knowledge of facts that others don't have. See: "trade secrets."

Exactly!

Efficient market hypothesis virtually demands this and instructs us that economies should be run by the free market because by acting on the information via the market we disseminate information about the supply/demand of goods and their alternative uses. By buying iPods under warranty he puts upwards pressure on price, disseminating information that an iPod under warranty is more valuable.

Sorry OP, just replying here so one of your commenters sees it:

schraeds, you've been hellbanned for the last 30 days, just FYI. I see you trying to post twice, but every comment you've made for the last 30 days has been auto-dead.

I honestly cannot figure out why, unless you deleted an atrocious violation of the rules or spam. Your last comment that wasn't auto-dead was about the "hippy generation", so maybe someone took offense with that?

http://news.ycombinator.com/threads?id=schraeds (turn showdead on)

I would gladly sell something under warranty rather than go through the pain of having to deal with a corporate. It is not a cost free transaction to complete a warranty claim, as our own time should be valued, and not all of us are that organised.

I did something similar with a MacBook Air after I broke its screen. I purchased a new MBA immediately, and eventually sold the old MBA to the repairer.

Agreed. Huge dick move on behalf of Apple. If in fact the warranty was/is "transferable" (haven't read it myself) than you weren't doing anything wrong. Should have kept the business going.

They let him keep the money he'd made so far. Obviously he didn't do anything wrong, but he clearly wasn't going to be able to take on Apple in court. (Yes, this is stupid.)

"$65,000 in revenue" "My profit margin was not monstrous"

So, not sure what the actual profit was, but nice nonetheless.

Good catch. Now I'm a little disappointed

It was indeed $65,000 in revenue. I hope there wasn't too much confusion there :)

I think some terminology might be in order... net income = revenue - expenses

So, was your net income $65,000 or was your revenue $65,000?

I think it's abundantly clear from the article that revenue was $65,000.

> "My profit margin was not monstrous but the hard work and the lessons learned were invaluable"

To say nothing of the front page of HN

You have a bright future ahead of yourself as a VC-backed tech company CFO.

Almost: except that he actually has revenue.

Eh, so did Groupon.

Soooo... How much income did you have from all that?

The title says "earned". I believe the confusion would stem from the title.

The best part of the story to me, is the Apple Attorney who decided to give a slap on the wrist before moving on to the potential legal carpet bomb mission.

In the age of organizations such as the RIAA suing teenagers or the elderly without such gestures, it is refreshing to read.

Sounds to me like they gave a slap on the wrist because he had done nothing illegal and therefore all they could do was try to scare him... and it worked. I could be wrong, though.

Well usually I'd expect some sort of limit to be buried in some legal document; it sounds like they called to scare him because somebody never wrote that in.

Oh I didn't consider this possibility at all (just blindly assumed that this sort of thing would be covered in the fine print).

We all know the company could have brought up a ton of charges if they didn't like him abusing warranty. I think as a kid, he was smart to agree and walk away with the money he made so far, rather than risk a costly legal battle.

Of course it was smarter. But that does not make Apple actions "refreshing".

But was he abusing warranty? They're transferrable.

I haven't owned an iDevice in some time so I'm not sure about the fine print (or even the bold print for that matter) but if the warranty terms do not explicitly prohibit or limit the number times a person can transfer a warranty or return a still in warranty device, then I don't see how they can bring a ton of charges with out looking like total douches. The proper course of action would be to issue an amendment to the warranty terms to change the policy. Then they have something to point to. But just having some random "nice uncle" lawyer make a call and intimidate the kid into submission is a pretty douchey thing to do.

intimidating him instead of due process in the courts because they didn't have a case

I had a similar little side business in high school putting chips into 1st gen playstations and selling pirated games, then someone i knew who did the same but at a much higher volume got busted and I immediately stopped. The only thing that ever happened to him though was he got his computers seized.

How did you go from perfect English in your first sentence to ridiculous abbreviations in your second? ("tht ... tho")?

I'm not the best typist on the iPad, I have corrected my mistakes.

Sorry.

How do you go from friendly to total dick in so few characters?

Is there any possible outcome to your question that would serve any purpose other than to rile the parent poster?

Hah yeah me too, I had games shipped from Asia in 1997 or so, that was so exotic back then that people came over to my house to see what packages from the other side of the world looked like (hint: exactly like the local ones, except maybe with a few more stickers). Then in the later versions of the PS1 the solder points became so small that I needed to solder the chips in with a magnifying glass and a very thin needle-like soldering gun tip, which I accidentally got right a few times and then botched a customer's Playstation with. Whoops. Stopped doing it after that - it was getting repetitive anyway, and profits had always been very low, even before factoring in my time.

There used to be a sub-telco called Genie in the UK (powered by O2/One2One) when I was in school, they offered unlimited texts on a pre-paid sim card tariff for £10 a month. I used to tell them around my school for £15 per sim card, I learnt a lot about supply and demand... eventually, I became known in my area and started to sell them to students in other schools, this kept me in pocket money for a year before they dissolved the sub-telco. It wasn't much but it was enough to make me understand some principles of business.

The most important part of this story is that he educated himself as a high schooler on the concept of arbitrage.

Unfortunately, he succumbed to the concept of leverage.

I enjoy the short sweetness of your story. Love your spirit, at such a young age. You sound like the kid I wish I was.

What did you do with that money? Blow it on kid stuff, or save it? Use it for anything specific?

agreed, the brevity and concise writing made this a great article. The author obviosly learned something from HS english class, well done.

the logical progression from a one off fix, to fixing friends, to dealing with parts shortages (buy bulk damaged units) to warranty repair scavange was awesome.

Awesome to hear, did something similar. In 2009 I failed a paper in high school and as a result had to rewrite the paper in 2010. Being into computers and stuff a few of my friends asked me to unlock their iPhones that they had gotten(This is in India and people use to abuse the 200$ iPhone by getting them through relatives in the US). I soon realized there was a market for this sort of thing and started unlocking iPhones as a business by advertising on craigslist. Made about 1100$ which in Indian rupees is about Rs 55000 which is a lot. Helped paid for a lot of my computer gear.

I started like you, but never made more than a few bucks. I unlocked Nokia phones for a couple of friends and then charged ~$3 to other kids. I probably made less than $100 overall.

This was when Nokia phones could be unlocked by simply inputting the IMEI and phone network on a VB calculator and getting the code. I did tell them how it was done, but back then few people had Internet at home or knew how to use it, whereas I spent many Saturday mornings on the public library using their machines and connection.

everyone else that did something like this to Apple they eventually hired...could the author have gotten an internship w/ a nice stipend at, say, Apple's hardware design groups to replace his lost activity>

The author probably could not have gotten an internship with Apple. The one person I heard of Apple hiring like you explain was @comex, who worked on jailbreaks. By hiring @comex, they did 2 things:

1) Put an end to a jailbreaker's work 2) Hired someone to find security holes

While this is a pretty neat story, the author probably wouldn't be as valuable for Apple as someone like @comex would be.

Here is more information about that hire: http://techcrunch.com/2011/08/26/apple-hires-iphone-hacker-n...

For what it's worth, quite a few of the original iPhone Dev Team members got hired by Apple, and they tried to recruit all of us. Not sure about the later iPhone hackers, but in the early days they were trying hard to get all of us.

I'd be interested to read the terms of the warranty. Transferability may have been limited to personal use rather than the bulk warranty claims undertaken by the OP.

That's with my lawyer hat on at least.

With non-lawyer hat on, nice work OP in servicing a need and creating a business opportunity for yourself.

Nice work, I did the same with IBM Thinkpads, with the huge advantage that IBM supplied full hardware manuals, and lots of the parts were interchangeable. I would buy lots of broken laptops on ebay, use the parts, and sell parts that I didn't use back on ebay. Then sell the fully working laptops on craigslist.

Any advice you can give to me on starting a business in high school? This sounds like it would be an interesting and challenging thing to undertake. I'm 16, almost done grade 10. I can program at a okay level, having created a few web apps.

Identify an opportunity, then exploit it.

Revenue != Earnings

You were making 65 grand whilst still in high school. I was playing final fantasy VII. Not sure which was better .....

actually yes I am. Why the hell didn't i start tinkering with stuff earlier on. Kudos to you, and thanks for writing about it!! Best of luck

tbh I would guess he made something like 10-20k, as in the text he clarifies that 65k was revenue not profit or earnings. Good learning experience though.

A full-time summer job would net you... 5k? Multiplied by number of summers. Probably not as fun...

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