Vertu Mobile Phones: Luxury Redefined

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Case Details:

Case Code : MKTG151
Case Length : 11 Pages
Period : 2002-2006
Organization : Vertu
Pub Date : 2006
Teaching Note :Not Available
Countries : Worldwide
Industry : Telecom

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Background Note

Vertu, headquartered in the UK, was established by Nokia as a subsidiary in 2002. Although the idea to create exclusive luxury phones was first conceived by Frank Nuova (Nuova), the chief designer of Nokia, in 1995, it was several years before it took shape.

"In 1995, Frank Nuovo, the chief designer of Nokia, had an idea that mobile communication devices would one day be available not just in the mass market, but also in the luxury market. That idea was discussed and talked about for several years,"7 said Nigel Litchfield (Litchfield), president, Vertu. In 2000, Nokia began serious efforts in this direction.

"Just over two years ago, we secretly set up a company to (really) see if there was a business case,"8 said Litchfield in 2002. The existence of Vertu was finally revealed in Paris, the center of high fashion, in January 2002. The first Vertu phone, the Signature was launched the same year (Refer Exhibit I for a photograph of the Vertu Signature).

What Goes into a Vertu?

The Vertu Signature was designed to be a union of craft and technology. The phones were assembled entirely by hand in spotless workshops. Each phone had around 400 components (Refer Exhibit II for a photograph of the components) and underwent stringent quality checks.

The casing came in four materials - stainless steel (surgical grade), 18 carat yellow and/or white gold, platinum, and diamond-encrusted. The Vertu Signature phones had angular scratch-proof screens made of 69.25 carats of sapphire crystal.

The keys were made of precision engineered stainless steel and were set on jewel bearings. "Underneath each of these keys is a ruby bearing. The customer can press these keys over five million times and still get the same consistent, positive response. If you take an ordinary mobile phone, once you get beyond half a million key presses, you will start to find some problems," 9 said Litchfield...

Excerpts >>

7] Aloysius Choong, "Platinum luxury phones have 'no competition',", March 22, 2002.

8] Ibid.

9] Physical vapor deposition is carried out in vacuum chambers at temperatures near 300o C.


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