- By Region
Nokia is to sell its luxury subsidiary – maker of the world’s most expensive mobile phones – as the once dominant Finnish handset manufacturer overhauls its business in an effort to compete with Apple and other smartphone makers.
Vertu was created by Nokia in 1998 to tap into a niche market for mobile devices with price tags that rival luxury watches. The handmade phones sold by the UK subsidiary can cost more than £200,000 ($314,000), and typically include precious metal components.
Nokia has appointed Goldman Sachs to oversee the sale, which one person familiar with the process said was still at an early stage. Vertu has yet to be given a value, although annual revenue is estimated to be between €200m and €300m ($268m and $402m). One person with knowledge of the business said that there had been interest from private equity groups. The company is also likely to attract attention from luxury goods brands, given its emerging market customer base and the potential for cross-selling, the person said.
There are outlets selling Vertu phones in more than 60 countries, including dedicated shops, although the phones are seen to have the strongest following in Russia, Asia and the Middle East.
While the Vertu phones themselves are technologically modest, buyers benefit from a so-called concierge service: a button on the side of the phone that dials a team of assistants who can make taxi and restaurant bookings.
Nokia and Goldman Sachs declined to comment.
Nokia does not split the revenues from Vertu, although it has been reported to have delivered double-digit sales growth in 2010, significantly outperforming the group. Even so, Vertu has little overlap with the wider Nokia brand, known for reliable but cheaper mass market handsets.
Stephen Elop, Nokia’s chief executive who described the company as being on a “burning platform” when he took up the job earlier this year, has heralded extensive internal restructuring of the company and agreed a partnership with Microsoft in an effort to regain ground in the smartphone wars.
The use of Microsoft’s smartphone software has not been extended to Vertu phones.
Additional reporting by Anousha Sakoui in London