Vertu, founded in 1998, produced the world’s first luxury phone, and became known for its extraordinary design models and high-end customer service. On July 13, 2017, the company announced that it was shutting down its smartphone production.
The beginning of Vertu and Frank Nuovo
In 1998, Nokia was the global market leader in cell phones. On the wave of popularity, the company’s engineers and designers continued to push forward with ambitious new designs. Around 1995, it became clear that there was a demand for luxury phones in the market.
At Nokia, the idea of launching this division was promoted by a team of engineers and famous designer Frank Nuovo. However, Nokia was not the first company interested in this niche. The direction attracted Ericsson and Motorola, but both companies for a long time could not move from considering the issue to direct development.
It also took Nokia a while to discuss the topic, but Nuovo proved to be more persistent and persuasive than his Ericsson colleagues. In 1997 he got the agreement to develop the project from the company’s management.
An equally ambitious team was selected for the ambitious project. Nuovo took over the design, Nigel Litchfield became the president, and Hutch Hutchison became the chief engineer. The company was founded in 1998. The name comes from the Latin “virtus,” which means “excellent.”
The company released its first product under the new brand. Management had to work out all the details of the future model, select employees and suppliers in an atmosphere of absolute secrecy, and realize the design and technical goals, hiding the existing plans from the public and competitors.
Nuovo defined the main characteristics of Vertu phones – expensive, durable materials, precious stones and handmade. One of the innovations was the use of sapphire glass. Nuovo had to worry about finding suppliers who would make rectangular sapphire glass. At the same time, Vertu engineers faced the difficult task of integrating it into the metal case.
In 1999, the team working on Vertu consisted of 50 people. All of them were highly qualified specialists who passed through a rigorous selection process. During the interviews, they were given information about the project in general terms – all to maintain secrecy.
The first headquarters of the company didn’t appear until 2000 in London. At that time no real developments or prototypes had yet been made. Then Nokia set a strict deadline for the release of the first product – late 2001 or early 2002. The company’s management had to promptly solve the accumulated problems and bring the development to the last stage.
Attention was paid to all components. These included a sound system and a melody that would make Vertu stand out from other phones. One of the keys to achieving this goal was the melody of Sandpiper, written by Italian composer Dario Marianelli. Vertu has had melodies recorded by the London Symphony Orchestra, Ennio Morricone and other famous composers.
By the end of 2001, a prototype for the future phone was ready. One of the peculiarities of the development was the need to obtain permission to stage the sample. The appropriate permission was obtained from the Swiss Assay Office. The launch date was set for the end of January 2002.
Hand-assembly at Vertu proved to be a difficult process, with many employees lacking qualifications. The management of the company had to set up a special training school, The Vertu Training School, which lasted one year.
The phone was presented to the public on 21 January 2002 at the Musée des Arts Décoratifs in Paris. The first Vertu was called the Vertu Signature. Celebrities and the press were invited to the presentation. The company created a furore as a rare publication avoided the subject of the world’s first luxury phone. Vertu Signature, among other things, received a platinum case and sapphire crystal. The cost was about €24 thousand.
A special concierge service was available for owners of Vertu phones. Using this, regardless of the time and location, call the dedicated service and, with the help of a personal assistant, gain access to a wide range of services.
These included information, ticket reservations, restaurant reservations, and much more. The cost of the service could be divided into two parts: the customer paid for the call at the rate of his operator, as well as for “concierge”. There were two packages – the basic, which cost about €89 a month, and VIP – for €300.
Reviews of the Vertu Signature were positive, but the brilliant presentation and public response didn’t guarantee success. Only a few prototypes were ready at the time, and Vertu phones were to go on sale in the summer.
The company was required to finish the development in a short time, to establish mass production and at the same time continue to promote the phone. Vertu gave customers the opportunity to pre-order models and promised to start sales in August. The brand launched an extensive promotional campaign around the world.
At the same time, the company began to open stores and points of presence. But this didn’t solve the issues with the retail network. Classic models Nokia easily sold through operators, but with Vertu, this system didn’t work – a luxury phone was beyond the means of the average consumer.
The management decided to sell Vertu through boutiques selling jewelry and jewelry. However, it was not easy to negotiate. In contrast to the press, such networks initially didn’t particularly believe in the prospects of the “first luxury phone”.
Orders for Vertu Signature turned out to be much more than expected. However, things were not going so well with the production. The number of defects was too high. At first this led to a number of models being returned for rework, and because of this the delivery deadlines were not met.
Then, when customers did receive their phones, they turned out to be flawed as well. It was about small defects, but from the models worth, tens of thousands of euros expect perfection in everything. The situation was complicated by the lack of comprehensive service support. The phones had to be returned to the factory, which turned repairs into a lengthy process.
Gradually, the company’s specialists were able to establish and speed up production. The inspection of each phone also became as rigorous as possible. It was conducted in two stages: during the first stage, specialists checked the work of 300 phone functions (sound, microphone, screen, and more), and during the second stage, under a magnifying glass they studied the condition of the body and individual parts for the absence of scratches, roughness, and other deficiencies.
The rise and domination of Vertu
While the company was fine-tuning distribution, production and service, Nuovo and Lichfield thought about creating a new, more mass-produced model. It went down in history as the Vertu Ascent. The more affordable Vertu model was to allow the company to increase sales and make the leap from an experimental brand to a confident working brand.
Ascent was designed as a sports phone. This presented the developers with a number of completely new challenges. Nuovo had some sketches, but the initial vision was quite general.
The Vertu team was going to create a phone that would be a symbol of reliability and durability. The first problem was the choice of material for the case. Precious materials were not suitable for its stated specifications. They experimented with various available options to see whether a particular material would work.
A group of scientists at California University of Technology invented a suitable metal alloy. It was called Liquidmetal and had the following characteristics: high strength, corrosion resistance and resistance to wear. At the time when Vertu was engaged in the development of Ascent, this alloy was not yet known. The fact that a company engineer turned his attention to an article about his invention can be considered a happy accident.
Vertu launched the Ascent in 2004. The presentation was not inferior to the previous one, but this time the phone went on sale almost immediately. The cost of the model was €4.5 thousand. The Ascent was equipped with an extremely durable sapphire crystal and a high-definition color display.
The Ascent became the phone that convinced the public and Nokia’s top management that the company was viable. It sold well, and Vertu increased demand by offering new color variations of the phone. In 2006 the company has launched the limited edition Ascent Racetrack Legends, named after the world’s famous race tracks. Their name was laser etched on the back panel with a picture of the track next to it.
In 2006, was launched a new line called Vertu Constellation. One of the main features of the model was the original design. Constellation had a ceramic keypad. The cost of the model was from €3.7 to €4 thousand.
The success of Constellation entailed Nuovo’s final departure from his position as Nokia’s chief designer. From then on he focused exclusively on Vertu.
The company’s limited-edition collections were produced in collaboration with famous designers or brands. The cost of such models increased to hundreds of thousands of dollars. Thus, released in 2010, the Vertu Signature Kissho collection, made in the Japanese theme, included only four phones for $ 215,720. The designer was the Japanese artist Kazumi Murose.
In 2008, the company celebrated its tenth anniversary. To commemorate the occasion, Nokia released an updated Vertu Signature. It differed from the first version with a redesign, otherwise the model remained the same, without the camera and Internet support.
In the same year, the Vertu Ascent Ti was released, which continued the company’s sports series. By the end of the year the range was completed with three models, Nero, Rosso and Giallo. The development was conducted in collaboration with Ferrari, which determined the features of design and some other solutions.
Each of these models received the Ferrari logo on the front and back sides. Designers made the battery cover look like the hood of the car. And the sound of the engine of the Ferrari F430 and 612 Scaglietti was installed on the phone as a ringtone.
In 2009 the first Vertu clamshell, the Constellation Ayxta, went on sale. The phone’s functionality was based on the Series 40 platform, so you couldn’t call it unique. Meanwhile, the model won due to the painted themes and unique ringtones.
The model received a new feature, The City Brief, which was supposed to be a real boon for tourists. It is a kind of guide and assistant that provides information about places and events in the city. It also adjusts clocks according to the local time zone and provides information about the weather.
The Constellation Ayxta has a metal and leather case. A year later, the company launched a number of models of this phone with a different design. The sub-series Ayxta Silver and Blue Ceramic aroused the greatest interest among connoisseurs. Ceramic blue was used in them for the first time.
In 2010, the Ascent X was launched. The company traditionally launched several versions of the phone with bodies made of different materials: aluminum with rubber inserts, aluminum with leather inserts, titanium with leather inserts.
Also in 2010 the first Vertu smartphone, Constellation Quest, was presented. It used Symbian as the operating system and was similar in functionality and appearance to Nokia E72. The model existed in different versions: a version with a case of polished stainless steel, black leather and sapphire keys would cost € 7.8 thousand, and the most expensive with a gold body and black sapphire keys – for € 21.5 thousand.
The phone was positioned as a great solution for entrepreneurs, but the company failed to surpass Blackberry and the rapidly gaining momentum of the iPhone. This relative failure was a precursor to the collapse that awaited Nokia itself.
The fall of Nokia and Vertu
Despite all the successes and the global name, Vertu remained dependent on Nokia. While the parent company was doing well, there were no particular problems, but in the 2010s the situation began to rapidly deteriorate.
Nokia had always done well against long-standing competitors, but missed out on the potential of new ones. In 2007, Steve Jobs launched the first iPhone, which got, among other things, a multi-touch feature. Apple defined the development of the smartphone industry for years to come, and Nokia had nothing to respond to it.
The release of the iPhone wasn’t the factor that destroyed Nokia, but it set in motion the process that led to it. In 2008, the Android operating system appeared. The market was skeptical about it. Catching up with Symbian, Windows Phone, and iOS seemed an impossible task. But by keeping Symbian, Nokia was one step behind again. At the end of 2010, Android became the world leader. A year later Nokia’s market share dropped from 39% to 24%.
At the end of 2011, Nokia lost €1.3 billion. Mistakes in the assessment of market trends and the crisis of ideas are cited as the main problems not only for Nokia, but also for Vertu. According to experts, the parent company, solving its own problems, began to pay minimal attention to the brand of luxury phones, and Vertu was much less stable than it might seem at first glance.
In 2011, Vertu launched its first touchscreen phone, the Vertu Constellation T.
Despite the innovation, most of the experts, reviewers, and just customers paid attention to the fact that the company’s first touchscreen model appeared only in 2011. Internal changes at Nokia also played against it.
In 2010 Stephen Elop became the new head of Nokia. After a while, he thought about selling Vertu. In 2012, this news was confirmed. The buyer was the Swedish EQT Partners, which paid more than €200 million for the luxury brand.
The change of ownership entailed a series of innovations. Massimo Pogliani became the new CEO. The company switched from Symbian to Android. The first model to receive this operating system was the Vertu Ti, released in 2013. Android was supposed to make Vertu not only a beautiful and reliable phone but also a functional one.
As part of Vertu Ti, the company launched two services at once. The first is Vertu Life, which allows you to receive invitations to private events. The second was created together with Silent Circle and was called Certainty.
The service specializes in the protection of user data and device security. Its services also include 24-hour technical support, consulting and cryptographic encryption. The release of the Vertu Ti was received with enthusiasm, but the brand’s problems were not solved.
Vertu’s main feature has always been exclusivity and convenience. It is a true internal ecosystem, a kind of elite club of brand users. So, Vertu Me provided the company’s clients with a branded email account, informed about new features and attached a list of connected services.
At the end of 2013, the company has launched another model – Vertu Constellation V. It also received the Android operating system, a titanium body, and leather trim. Compared to the Vertu Ti, the model was considered a budget model. The cost was about €5.1 thousand.
n 2012 and 2013, the company’s revenues fell by a total of 40%. One of the reasons for the drop in sales in 2013 was the release of a new version of the iPhone 5S Gold, which interested customers much more.
The iPhone as a whole has become almost the main rival of Vertu. Firstly, it was also bought to emphasize status. Secondly, the iPhone models can also be encrusted with diamonds, covered with gold and other precious metals. Such production is engaged in the company, which specializes in premium-class phones, Gresso.
In addition, Vertu began to lose popularity among celebrities. Previously, the company’s phones were perceived both as a work of art, and as a way to emphasize the status and wealth. Now the latter came to be tinged with negativity.
The press criticised Vertu models for being too opulent. The phones were now seen as tasteless. The changing image and style of the modern wealthy people also played their part. In business, the benchmarks for many are Elon Musk and Mark Zuckerberg, but it is difficult to imagine them owning a Vertu. It is also uncommon to see pop stars or famous actors with their phones.
In 2014, EQT Partners made attempts to restore the situation: it restructured, fired, and changed the top management. But such measures didn’t bring any visible results. New models were called upon to return the company to its former status.
In 2014, the company has launched the Vertu Signature Touch. It was supposed to combine functionality, luxurious and stylish design, and reliability. However, the publication Wired found in it also shortcomings: the backplate was very hot, and the battery quickly discharged, but it was impossible to replace it due to the peculiarities of the design of the phone.
At the end of 2014, the company’s loss amounted to $65 million. In 2015, Vertu was sold again. The new owner was the Hong Kong fund Godin Holdings. Gordon Watson became the head of the company. The new owner has brought more problems than good. The loss-making Vertu tried to return to the top, but to no avail. It was as part of Godin that the company stagnated and hadn’t launched a single new model for the entire year.
In 2017, due to significant losses, Godin Holdings got rid of Vertu, selling it to Turkish entrepreneur Hakan Uzan, or rather his Cypriot company Baferton. The cost of the deal was only $61 million.
What plans when buying the company Uzan had – is not clear. Under his leadership, Vertu remembered the release of the record expensive, exclusive phone Signature Cobra Limited Edition. It was a reissue of another ultra-expensive company model, the Vertu Signature Cobra, and looked a lot like it.
The Signature Cobra Limited Edition collection includes only eight phones. The body of the phone is encircled by the figure of a cobra, the body of which is decorated with 439 rubies, and the eyes are made of two emeralds. The cost of the phone was $360,000. It was delivered to customers by helicopter. However, the release of this model, too, didn’t help improve the company’s position.
At the end of June 2017, it was announced about the conclusion of a partnership between Vertu and the Chinese TCL Communication. For $40 million, Vertu received the right to use the partner’s technology in its own phones. The brand planned to produce about 30 thousand phones.
On July 13, 2017, the agony of Vertu ended – the company announced that it would cease its business. This led to the dismissal of 200 highly skilled employees. The amount of the company’s debt was $165 million. Over its history, Vertu was able to sell about 500 thousand phones. The rights to the brand and the technology were retained by Uzan.
