Debt-laden luxury smartphone maker Vertu may shut down operations

Around 200 employees are being asked to leave.
Debt-laden luxury smartphone maker Vertu may shut down operations
Debt-laden luxury smartphone maker Vertu may shut down operations
Written by :

It used to be a symbol of prestige and pride to be carrying a Vertu phone till some years ago. Some of their models used to be priced as high as $10,000. However, latest reports suggest that the company making the Vertu phones is on the verge of shutting down.

The signs were already there. The company was originally promoted by Nokia and then got sold to a Turkish businessman, Hakan Uzan, who is currently on an exile living in Paris. The company has huge debts and the efforts by Uzan to make a meager settlement of just less than 2% of the total amount owed did not come through since the debtors rejected the offer.

The company is left with no option but to shut down operations. Some 200 employees are being asked to leave.

Analysts believe this situation with Vertu has occurred primarily due to the launch of high-end smartphones with a plethora of features which could not be matched by any of the Vertu models.

It is true that the brand was positioned as a luxury product and has genuine leather and diamond and gold and other precious metals and that is the reason for their high prices. However, the smartphone market reached a stage where functionality won over mere pride of possession.

Some analysts even go so far to pronounce the demand for the Vertu phones before the advent of the iPhones and that afterwards. Clearly, the universe for the phone suddenly shrank and only those whose requirement was not really a functional smartphone, but just a showpiece remained the prospective buyers.

It is now learnt that since the owner has the right to the use of the brand Vertu and the technology behind it, there may be attempts made to re-introduce the phone in a new avatar, with toned down materials like faux leather and so on.

The devices may be contract-manufactured through TCL, the Chinese electronic major.

Only the ensuing days will reveal what is in store for the company and the Vertu brand.

Related Stories

No stories found.
The News Minute