Published: Fri, July 14, 2017
Sci-tech | By Carrie Guzman

Luxury phone-maker Vertu collapses

Luxury phone-maker Vertu collapses

British luxury phone maker Vertu has gone into liquidation, resulting in the loss of almost 200 jobs, it has been revealed.

Vertu, known for its high-class, jewel-embedded handsets has shut shop. The company's devices ran into the hundreds of thousands of pounds apiece, but with specifications matching smartphones sold for a fraction of that price - the extra money, the company convinced its customers, being worth it for exclusivity, design, and premium materials. This closure will also lead to the loss of 200 jobs in the UK.

In March, the company's Chinese owner sold it to Hakan Uzan, a Turkish living in Paris.

Vertu, the luxury phone brand, has been in a debt of £128 million. However, they did boast premium materials like ostrich leather and jewels. Originally established as a division of Nokia in the late '90s, Vertu changed a number of owners throughout its 19-year history, having been purchased by Uzan just last year.

Speaking to the BBC, IHS Technology analyst Ian Fogg explained that Vertu's business model was highly unusual.

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Analysts on average expected the company to post consolidated profit of Rs 6181 crore, according to Thomson Reuters data. The new, high-growth services aren't yet big enough to bring in substantial profits.

Vertu phones carry hefty price tags - its Signature range starts at £11,100, and one model featuring 18-carat red gold costs £39,100.

The phone-maker had been experiencing financial difficulties for some time and Uzan's plan to pay £1.9m against an an accounting deficit of £128m was quickly quashed by regulators. Uzan will preserve the brand, technology and licenses.

"They hand make the phone at incredibly low volumes and they were incredibly high-priced", Fogg said, noting that the use of synthetic sapphire and such unusual materials may also make the production process hard.

In case you aren't familiar, Vertu are a high-end luxury phone brand making phones than can go up to £30,000 (RM156,000).

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