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Vertu – strategy change and plans for 2010

Vertu almost single handedly created the market niche for luxury phones. The company not only pioneered such products, but proved they can be popular. Before Vertu the phones priced at tens of thousands of euros were viewed as exotic gadgets, while today it doesn’t surprise anybody and the number of manufacturers specializing in luxurious products has increased. Remember Tag Heuer, Ulysse Nardin, Versace, Christian Dior and others. The last two brands are backed by ModeLabs from France, who was also instrumental in the creation of Tag Heuer MERIDIIST. The sales of newcomers to the luxury phones market are not stunning, but are quite noticeable. Little by little they eat out from Vertu market share as not everybody wants to be similar and the customers are looking for distinctive models, albeit produced by a less famous brand. Vertu and its competitors are also pushed by boutiques and companies, which dress standard models in bespoke frames made of different materials. We can name Mobiado, Gresso and other ones. These products belong to a slightly different class, but they fill in the gap between the most expensive models from Nokia and the cheapest Vertu devices. What do we see here? Is it possible for Vertu to lose its market share in favor of new companies in the niche? I believe it will not happen in the foreseeable future. It is explained not even by the reputation of the brand among its customers. Starting from 2009 Vertu has been much quicker in all activities, which helps to attract new buyers. In fact Vertu is creating new market segments.

The first clamshell model of Vertu in the form of Ayxta laid the foundation. Other companies cannot offer anything similar and the complexity of executing a luxury phone in any other form factor but the candybar becomes much higher. You just can’t take a standard clamshell model and equip it with the metal frame without the compromise for ergonomics. Hinges and springs have to be adjusted to the new frame weight. At this moment other manufacturers face numerous technological issues and the absence of powerful R&D department makes their positions vulnerable. Vertu has the advantage because it always experiments with different materials. In fact, the company has become the biggest phone manufacturer with different materials in store, including the cutting edge composites.

According to Vertu not only the design, but materials as well should distinguish their models. These should not be necessarily precious stones and metals as high tech is also welcome. First of all the customers must like it. The possibilities of Vertu will be boosted even more in the future and it will be able to impose its taste on the maximum number of people (surely, within its niche only).

The use of different materials suggests itself and it has been already done in many Vertu models, when the price depends upon the material of the keypad (ceramics or metal) and the frame (titanium or aluminum). In the future this approach will become more dominant. We should not forget another area for growth, which other manufacturers cannot tap into. Vertu can offer not only different models, but various form factors. Its portfolio already boasts candybars and a clamshell. The next step can be to introduce a slider. Such model is in development, but will be unveiled no sooner than the middle of 2011. The autumn of 2010 will see the release of a QWERTY phone from Vertu (built around Nokia E71/E72). I am not going to describe the model as it is not so important for this article. It is important though that Vertu starts to expand its portfolio and offer different models to retain its advantage over the competitors.

Which Vertu models are the most prestigious? Which models enjoy better sales? The answer is obvious, because cheaper models sell better. The market rules remain the same in this segment as well, so if you need a prestige phone you should buy not a standard Vertu, but a limited edition (for example, 100 items). The price will get higher at least three times. For the movers and shakers the company offers real masterpieces. The anniversary of its boutique in Japan (situated in Ginza and remarkable even by its exterior design) was commemorated by the four models symbolizing the seasons (Vertu Kinko, Vertu Kikusui, Vertu Nanten and Vertu Daigo). There was no mass production and each model was produced in a single copy. Was it unique? Surely, but the price was around $220 thousand for one model. It is worth the money because no one else in the world will have it if you are ready to pay for this splendor.

This model was based on Signature from the latest collection – hand painting and panels of gold. Typical Vertu. With the elegant celebration of its shop anniversary the company eclipsed all announcements from the watch exhibition in Basle. Do you need an expensive phone? A shamelessly expensive one? Then think of Vertu, because there are no other variants. The rest is a compromise and not the best one.

Here we see an interesting element of Vertu strategy. On the one hand, main sales come from the “mass” market with entry level models. On the other hand the company has to support its leadership in the segment and create unique products, which cost a fortune. Vertu starts from the “standard” model and then uses it to create limited editions with different styling and price. You know its Vertu, but the details show that the owner spared no expense. These models are just different.

Sometimes the owners of Vertu may pair their phone with the cheapest handset on the market, because their status allows them such an eccentricity. It is a kind of bravado. Earlier these were entry level Nokia phones, now they are replaced by cheap Samsung models.

2010 collection – main models

Let’s look at Vertu collection for 2010 to understand what the company has to offer until autumn (when new models will be unveiled) and how these models are priced. We will probably start with Ayxta or the first clamshell in Vertu portfolio.

Review of GSM/UMTS-phone Vertu Constellation Ayxta

Ayxta has a number of collections with different materials and colors. Tempo Collection offers two frame variants – violet and yellow. The first one features the central ОК button made of amethyst, and the second variant offers oriental topaz. Leather elements match these colors. The price is €6,300.

This clamshell is also available in two colors with ceramics – silver and blue. The collection is aptly called Ceramic. As always the keypad is made of ceramics alongside with the panel, which has Vertu logo. This model fetches €7,300.

In Alligator Collection the alligator leather is represented in black or red with stones in place of ОК button.

Add golden band around the screen and a side button and you have one more variant of the clamshell. The device has only 15 g of gold, but the keypad is made of ceramics as well and the price gets up to €10, 200.

Add one more €1000 and you will have the same phone, but with diamond elements around the internal screen.

Those who like precious stones can go for the topaz variant, but without the diamonds. The price is more reasonable - €8,400. There are variants in blue and red.

Ascent 2010 collection starts with models in aluminum accompanied by panels of brown leather, grey and orange rubber. The price is €5,700.

Titanium frame with black or red leather elements goes for €6,500.

Another variant with ribbed titanium frame is offered for € 7,600.

Ferrari model could not have been overlooked. Its price has not been announced yet.

In Enamel Signature collection the models come from the league of their own and look very attractive. Enamel and precious metals. Don’t ask about the price.

Only 100 items were made in Rock collection for Signature model. They look nice and the price of €16, 000 fits the limited edition.

Among accessories you can find simple headphones. They do not work with current Vertu models straightaway as they lack 3.5 mm jack, but in autumn everything will change.

Brief conclusion

Many people view Vertu phones just as curiosity they will never buy. A quick guide to 2010 collection is not the reason to go to the shop and buy such a handset. It just allows getting insight into Vertu range, learning about the prices and appreciating the design and materials. The main message of the article is that Vertu is on the change trail and in the future the collections will be updated quicker with the number of offered products to be increased. This way Vertu reacts to the emergence of other market players, which promises interesting solutions in terms of design and materials.

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Eldar Murtazin ([email protected])
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Translated by Maxim Antonenko ([email protected])