When a phone call is a luxury

Vertu will be producing phones for the luxury market

By BBC News Online's Jane Wakefield

Forget the custom-made Snoopy phone cover, the future of mobiles for the wealthy lies in high-cost, high-fashion handsets.

Nokia is setting up a subsidiary called Vertu to make luxury phones for the seriously loaded.

Top-of-the-range phones are not new. Ericsson has made gold-plated versions of its phones and Motorola has upgraded some of its handsets to appeal to wealthy customers.

With Vertu, Nokia is going one step further. It aims to create mobile phones that, one day, could be regarded as expensive antiques.

Upgradeable insides

The phone will come in a variety of precious metals, boasts a sapphire face and leather sides.

Creative director and designer Frank Nuova stresses that the phone's internal mechanism will also be of the highest quality.

The handsets will have a special key to connect the user to a "concierge service" for booking theatre tickets and for satisfying other demands.

We have had tremendous interest from business people and the fashion and entertainment industries

Frank Nuovo, Vertu

The guts of the phones will be upgradeable so that users can keep up to date with the latest technology.

Phones will range from £3,700 for a stainless steel model to £15,000 for the top-of-the-range platinum option.

New markets

With the mobile phone industry struggling in the wake of a global downturn and facing an already saturated market, manufacturers will increasingly turn to niche markets to make money, believes Paulo Pescatore from research firm IDC.

"The market in Europe is very mature and firms are looking at handset replacement rather than going after new customers," he said. "The question is how do you get people to upgrade?"

A bejewelled phone could be one option.

The fact that Vertu was going to have 200 employees and be headed up by Nokia's top designer Frank Nuovo showed a serious commitment to the luxury market, said Ben Wood, a mobile phone analyst from the Gartner Group.

"No-one has placed such a high commitment before and it has to be about more than selling £15,000 phones. Our belief is that down the line, it will look at premium phones made with high-quality materials but cheaper," he said.

Aspirational phones

Mr Nuovo denies the firm has any plans to introduce any other ranges and claims that the company's projections for take-up of the luxury phones are high.

"Even if we only get a tiny percentage of what we have predicted we will be doing very well," he said.

"We have had tremendous interest from business people and the fashion and entertainment industries."

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Nokia was one of the first mobile firms to recognise the importance of brand, and Vertu products will be its most aspirational to date.

"Mobile phones now are about style and fashion and the coolness of the product is a big factor in purchasing decisions," said Mr Wood.

This does not necessarily mean that Nokia has put style before technology.

With a commitment to rolling out 3G handsets and an estimated $1.3bn spent on research and development, Nokia would be under no illusion about the need to stay at the cutting edge, said Mr Wood.

A personal appointment system at Vertu's London headquarters and the name itself conjures up images of exclusive jewellers, but here it already faces competition.

London jeweller De Grisogono has seen the potential for mixing precious stones and technology and has already made around 20 diamond-encrusted phones for its clients.

"Our designers in Switzerland came up with the idea of gems set in mobile phones. It can cost anything between £18,000 and £23,000 but it is up to the individual how many diamonds they want," said Carolyn Benson, marketing manager for De Grisogono.

Danger points

Such luxury items come at quite a price, but it may not just be your pocket that is damaged. With mobile phone theft in the UK on the increase, carrying a jewel-encrusted mobile phone could be dangerous.

The Home Office has warned all mobile users to be wary of using phones in public following a spate of violent attacks.

"Be very discreet," said a Home Office spokesman. "You wouldn't walk down the street with your wallet in your hand and often mobile phones, especially jewel-encrusted ones, are more valuable than the contents of your wallet."

The first raft of Vertu products - available in the summer - are probably only going to find their way into the pockets of oil sheiks and pop stars.

But if you do decide to spend your inheritance on one, try not to leave it in a taxi.