Troubled phone maker Nokia is attempting to unload its luxury mobile-phone brand, Vertu, for a reported US$265m (€200m), the Financial Times is reporting. Nokia is being advised by Goldman Sachs on the deal and is currently in talks to sell the brand to private equity group Permira.
For the baller who has everything but an iPhone, the bespoke Vertu phones are handmade in England and are rumoured to smell like Italian leather, 50-year-old whisky and freshly showered butlers. The phones are made from the finest materials such as stainless steel, carbon fibre and titanium. They are tricked out with exotic leathers (calf, ostrich and alligator), precious metals (gold, platinum) and, of course, rubies and diamonds.
The London Symphony Orchestra makes all the Vertu ringtones, and it takes 15 days for the company to make a single sapphire-crystal display.
Most of the brand’s handsets are woefully outdated, mimicking top-of-the-line feature-phone and BlackBerry design from five years ago. Vertu’s most expensive phone was the tacky $310 000 Signature Cobra, released in 2006. The dated tech would seem to show a brand that has been largely ignored in recent years. However, in 2011 it released a touchscreen phone, the $5 000 Constellation, and earlier this year it launched a series of dragon-themed phones to celebrate the Year of the Dragon.
Unsurprisingly, the technology is not what makes Vertu valuable, according to the Financial Times, which cites a source close to the sale.
Rather, the brand’s name has cachet among the rich and fabulous, and could be used to market to the coveted group internationally. That would make the brand a good fit for Permia, which currently has high-end companies such as Hugo Boss and Valentino in its portfolio. The Financial Times estimates Vertu’s annual revenue between €200m and €300m.
The sale is a logical move for struggling Nokia, which posted a $1,7bn loss in the first quarter. Last week, Standard & Poor’s downgraded Nokia’s rating to “junk”. The one potentially bright spot for the Finnish company is decent sales for its Lumia smartphones — it sold 2m in the first quarter of 2012.
In letting go of Vertu, Nokia is selling more than just overpriced, blinged-out handsets. The company also offers luxury services such as a 24/7 concierge service, city guidebooks for the jetsetters and extra-special technical support that includes automatic data backups, and two (two!) complimentary repairs a year. The company has been around since 1998 and has approximately 600 employees. — VentureBeat
