After running with what seemed like an unsustainable business model for years, luxury phone maker Vertu has shut down. The BBC reports Vertu is currently in the process of liquidating its assets, and 200 people have subsequently lost their jobs.
Vertu had previously changed hands a couple of times since being founded in 1998, most recently being sold by its Chinese owner in March to a Turkish businessman who planned to put in the necessary money to keep it going. It is reported that Vertu was running on a deficit of £128 million, however.
On the face of it, this isn't all that surprising. Vertu has made some absolutely gorgeous smartphones with brilliant materials and truly unique craftsmanship that were fun to think about owning. But the prices were completely out of consideration for just about everyone — its most recent phone, the "mid-range" Constellation, started at $6,000. Some models were over $15,000.
People want a great smartphone experience more than they want a diamond-encrusted phone.
The prices were that high because they were hand-made in the UK out of exceptional materials — and naturally, produced in very small numbers. At the same time, Vertu wasn't able to keep up with the latest innovations that all smartphones were offering — its specs weren't great, its skin of Android was dated and it never produced a great camera. This model of creating bespoke ultra-luxury phone made far more sense 10 years ago before high-powered smartphones were the norm, but in the past few years this model was becoming increasingly unsustainable.
Even multi-millionaires, with all of their conspicuous consumption, typically just use the same iPhone 7 or Galaxy S8 that you and I do because they're simply the best phones. These flagship smartphones are really good, and having a phone made out of calf leather, titanium, sapphire and diamonds actually isn't worth using subpar software and a mediocre camera.
Vertu's Turkish owner will retain the rights to the Vertu brand as well as its in-house technology and licenses, but it isn't yet known if he plans to do anything with it. For now, the select few who own a Vertu have an (even more) extremely limited edition piece of smartphone history.