SEPTA surveillance video captured the two young boys around 7:30 Thursday morning.
The train stopped at Broad and Wyoming. As the doors were about to close, police say the smaller of the two boys, a 10-year-old, grabbed the cellphone out of the victim's hand.
He sprinted away with a 13-year-old boy skipping right behind, wearing his red backpack.
As they climbed the stairs, the 10-year-old can clearly be seen holding the stolen, white iPhone 4 in his hand.
"To hear that it is a 10-year-old and a 13-year-old, it's like what is the world coming to? It's getting younger and younger," said Mercedes Mays.
The victim, a teacher, kept going on the subway. At Broad and Olney she told a SEPTA police officer what happened.
The woman also told police that she downloaded the iPhone tracking app. Using the officer's smart phone, they tracked her stolen iPhone to 9th and Wyoming.
Police responded and found the children standing on the corner, stolen iPhone in hand.
"I'm sad about it because these children need to find something to play with, something good instead of trying to take people's stuff. They need to take pride in their own stuff," said Alzce Bailey.
Police encourage anyone with a smart phone or mobile device to download a tracking app, so any thieves, big or small, can be caught and any stolen phone found.
"We do encourage people to use that, because they are helpful. It makes it a lot easier for us to track the phone," said Teresa Clark, SEPTA police.
As for the children, they were taken into custody and their parents notified. They now face charges of theft and receiving stolen property.