Vertu, the British maker of bejeweled, handcrafted, multithousand-dollar mobile phones, had been kind of left for dead in the marketplace a little while back. It was founded as a subsidiary of Nokia, so its phones were based on Nokia's underlying technology. But then Nokia abandoned its own technology in favor of Windows Phone which left Vertu selling extremely expensive devices based on badly outdated software. But now with the release of the Android-powered Vertu Ti the company is getting back in the game.
That's leaving many people in the United States—the dominant player in the smartphone marketplace—scratching their heads a bit. Sure the Android-powered phone doesn't suck the way the old one did, but we're still talking about a smartphone with a starting price of about $6,000. A phone that's not in any way technologically superior to an iPhone 5S or a Galaxy S4. Isn't that crazy?
After my recent visit to Asia, Vertu's biggest market, I think it just may be crazy like the fox. The key to understanding the product was really to see the Vertu boutiques in the Asian context. They were unavoidable. I saw one at the Ion Orchard Mall in Singapore. I saw one in the ground floor of the Metropole in Hanoi. I saw one in the airport in Hong Kong and one in the Pacific Place mall in Hong Kong and another one in the IFC mall in Hong Kong. (Central Hong Kong is essentially an interconnected web of shopping malls, so you end up walking through a bunch of shopping centers.) And the Vertu shops weren't adjacent to Apple stores or people hawking Samsung and HTC devices. They were next to Hermes and Gucci and Montblanc and Rolex.
Seeing that juxtaposition, and seeing it over and over again, and seeing it on the continent where luxury brands in general are seeing all their growth made it snap into place.
Buying a Vertu smartphone is no more or less ridiculous than buying an extraordinarily expensive handbag or pen or wristwatch. Because the luxury category is well-established in the West but smartphones are new, the Vertu proposition strikes us as incongruous. But in place where virtually everyone was very poor until very recently, it's six of one half a dozen of the other. Now of course on some level, all this stuff is totally insane. But it all exists on a perfectly parallel plane of insanity. If all these other luxury brands can succeed, there's no reason Vertu can't.