As it moves to realign its business to compete with Apple and Android , Nokia is reportedly selling off its luxury phone unit. Although Nokia has not confirmed or denied the rumors, the Financial Times is reporting that the Finnish handset maker has hired Goldman Sachs to broker the sale of Vertu.
Nokia launched Vertu in 1998. The company sells phones that cost upward of $5,000 and as much as $315,000, rivaling exotic car brands and fine watches. The phones are made by hand, and often include diamonds and hand-stitched leather.
"My understanding is that Vertu is profitable. Vertu has always gone after a completely different crowd than the regular Nokia, which would both explain why Nokia may be trying to get out of the business or trying to sell it instead of shutting it down," said Avi Greengart, an analyst at Current Analysis. "Nokia has never broken out the financials."
Indeed, Nokia doesn't offer specific earnings for Vertu in its quarterly reports. But the Financial Times reports the unit drives between $268 million and $402 million annually. Vertu has flagship boutiques in London, Paris, Milan, Singapore, Hong Kong, Tokyo, New York and Las Vegas. The phones are sold in more than 50 countries.
Vertu has relied on exclusivity -- along with celebrity endorsements from the likes of songwriter Seal, actress Michelle Yeoh and chef Alain Ducasse -- to demonstrate its appeal to the uber rich. One of the key features of Vertu phones is the Concierge, a personal dedicated lifestyle assistance service that's available 24/7 in any language. When users press a dedicated button on the phone, the concierge answers and provides anything from gift ideas to restaurant reservations.
"Vertu not only doesn't follow the trends and it has fairly clunky handsets with very limited functionality. But Vertu has come out with limited editions phones in sets of six," Greengart said. "People would buy all six of them at $8,000 or $9,000 a pop as a collection. It's important to note that Vertu phones are a functional piece of art."
Vertu is catching up with the times, though. The luxury handset maker introduced the Constellation Quest a year ago. Constellation is a QWERTY device that offers the latest business tools. The home screen is minimalist, displaying only the essentials users hand pick. A Vertu design signature analogue clock automatically adjusts for the world traveler.
Vertu boutiques offer Apple-like customer service, helping customers configure their phone settings to suit individual preferences, including e-mail accounts, information feeds and social networking . The phone also comes with a cadre of other services aimed at affluent consumers, like a global digest and language-specific content feeds, as well as ongoing tech support.
"It's possible that Vertu can continue being successful just selling devices that only make phone calls because the phones are personal accessory status symbols. Nokia's CEO has killed a lot of products and refocused the company, but he hasn't killed Vertu," Greengart said. "It could be that Nokia postponed dealing with Vertu while it handled its core business. Now that Nokia starting to spin out the Windows Phones the company may be turning its attention to exploring a sale of Vertu."