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According to Outdustry, a music consultancy based in China, some very clever people have cracked the algorithm used to generate iTunes gift cards. With the new system firmly in place, $200 USD cards are selling for about $17.9 RMB or $2.60 USD.
iTunes cards going for insanely low prices.(IMG: Apple)
If this is true, it will not last for long, and likely the purchases made will be rendered useless by some trick. If not, then Apple is losing a ton of money.
The cards are being sold on taobao.com and, according to the report online, sales are booming.
The idea of purchasing legal music for far less than you'd pay in the U.S. isn’t new, neither is the business model of offering it to U.S. and E.U. or U.K. customers taking advantage of the huge price drop. For a long time, the secret was to use a Russia-based online service for just this type of shopping. This is the first time iTunes has been used in this fashion.
It would appear that, in China, digital music sales are rough considering the free MP3 search engine Baidu. Yet, Outdrustry is reporting that thousands of the hacked iTunes cards are for sale at one time.
Customers purchase a gift voucher, sent over the taobao IM system from someone who's offering them, and once they get it all that's required is to redeem the voucher via their iTunes account.
The owner of the taobao shop told Outdrustry: “...the gift card codes are created using key-generators.” The owner also said they had paid money to use the hackers’ service.
Others jumped on the bandwagon and, once the market was flooded with the cards, the price went from $320 RMB to as low as $17.9 RMB. However, there are reports that because of the attention dredged up by Outdrustry's story, prices are now shooting up.
The original story and all updates will appear on Outdrustry. The Web site and direct link to the article referenced can be found here.
The people behind the creation of the cheap cards say they use a key-generator; if that is the case then this is very bad news for Apple. However, there is no proof Apple would use a system that is so predictable.
Apple has not commented on this issue, and it is highly unlikely that it will any time soon.
In China, black-market iPhones are available, while legitimate phones are expected soon. This does not account for the sheer number of knockoffs. The generated cards are being used exactly as designed, to purchase music, movies, and other content from the Apple Store.
However, there is a serious risk with all of this.
What happens if China’s police bust the carders (those making and selling the generated cards) and obtain some sort of sales record? What happens to those people who bought the cards and used them? This line of thought is why it would be a very bad idea to purchase one.
While, on a technical level, the cracking of the generation codes for the gift cards is notable, something just doesn’t fit. Yet, in all fairness, The Tech Herald cannot tell anyone not to buy these cards. That is not our place. However, we can at least warn you that it all seems fishy, entirely too good to be true, and simply not worth the risk in our humble opinion.
If you do take advantage of the offer, use caution, and remember two things: You are breaking the law by using hijacked card codes; and Apple will come after you if it ever finds out who you are.
This is too large of a target for the Cupertino-based giant not to. Another thing to remember is fraud. You will need to use PayPal to transfer money, because of that you would need to expose your account.
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