The products, encased in metals from stainless steel to platinum and faced with sapphire, are expensive, exclusive and beautiful. With prices starting at US$ 4,900 all the way to the $20,000 (E 5,555-22,700) top of the line platinum model, this new brand declares itself “the world’s first luxury mobile phone.” This bold statement demonstrates exactly how far the mobile handset industry has come over the last decade. It wasn’t so long ago that a mobile phone, any mobile phone, was a luxury item.

Vertu’s Beginnings
In development for five years, Nokia has devoted serious consideration and commitment to this venture. Although it was positioned to augur a paradigm shift in the industry, the entire project now smacks of the late 90s. Those were the years, flush with bravado and optimism, when young upstarts stole the corporate limelight with their apparent Midas touch. They eschewed the trappings of wealth that once defined success; they preferred Beetles to Benzes. At that time, Nokia recognized that phones, like credit cards, were “lekking devices” – the new social badges for class, personality and community. These rich young things, it was probably surmised, would have loved the Vertu.

How times have changed, but the Vertu is still poised to create that segment of the mobile handset market that already exists in concept. The demand for look-at-me phones, certainly, is there. The BBC reports that London jeweler de Grisogono has already produced around 20 custom-made diamond-encrusted phones for its clients, costing between £18,000 and £23,000 (E 26,000-37,000). Ericsson and Motorola have both gilded their phones with gold and stones.

Vertu, however, promises to be much more. Its creative director and designer is Frank Nuovo. Nuovo is credited with steering Nokia’s astronomical rise with his understanding of how phones “connected people” with more than technology. In Nuovo’s words, the Vertu has been created in the tradition of “dedication to precision craft and design.”

A fascinating idea. The cognoscenti would recognize this effort as timely and timeless – marrying the tradition of craft with the technology of the day, much in the vein of fine timepieces. Vertu’s claim to apply the philosophy of craftsmanship – painstaking detail and superb, even obsessive, focus – to a category defined by speed of change is truly exciting.

Will it work?
The Vertu is indeed charting new territory, guided by canny intuition but few examples. The oft-cited comparison with fine watchmaking, though charming, bears little analogy to the mobile handset industry. The brands that depend on craftsmanship within the “luxury” strata of watches are able to do so insofar as they are supported by heritage. These brands, such as Breguet and Patek Philippe, put watches in the pockets of European royalty and US Presidents over three centuries ago. The Vertu is building its brand from scratch.

Moreover, Breguet created his eponymous brand, arguably the first luxury watch brand, after some two centuries of portable timepiece use. During this time, the core function of watches had crystallized to that of telling time. The mobile handset category, however, morphs rather than evolves. This is a category in which use is redefined so rapidly that new models slink into obsolescence almost as soon as they are launched.

To the challenge of product development, Vertu has its riposte, albeit from under the comfortable cover of its parent, Nokia. In the most literal application of Nokia’s mantra “Evolutionary Technology” to date, Vertu claims that the innards of each handset is supposedly upgradeable. Not only is this retreat into Nokia’s brand territory ill-advised, it is unlikely to persuade.

Experience demonstrates that form follows function in this category. Motorola’s flip phones were top-of-the-line when Smart cards promised to transform the way we shopped, ate and communicated. Once the adoption of Smart cards faltered, Motorola’s short flat phones of credit-card-width looked clunky next to their slimmer Nokia competitors.

Also one must remember that, with GSM technology, the Vertu is still only as good as your existing phone service and plan.

Where’s the Brand?
The upgradeability of the Vertu is, at best, merely an interesting technical feature for investors, journalists and marketeers. It won’t be long before another handset producer unveils something similar, or better. As a point of difference for the brand, it is also not that compelling – it returns innovation to the technogeek domain, from whence it came and from where Vertu’s definition of superior craftsmanship must depart.

In addition to upgradeability, the Vertu appears tentative in defining a new modern version of exclusivity. Again, the example of fine watches reveals no useful lesson. Such brands established themselves within the domain of the aristocracy when the main barriers to popular adoption were reliability and price. Neither currently applies to the mobile handset market.

To reinforce the image of luxury, Vertu is offering the services of a personal concierge to all Vertu owners round-the-clock. Prospective owners are ferried to their first Vertu appointment in a limousine; the handset has a dedicated key that connects owners to travel and entertainment advice and reservations across the US, Europe and Asia. This benefit is akin to a host of similar services already enjoyed by Vertu’s target audience. The Platinum credit card springs to mind. Need a sacher torte delivered from Vienna to a friend in the US? Consider it done. The Vertu Concierge is therefore unlikely to see much use – Vertu owners probably have their own personal assistants to do all that anyway. But it’s a nice touch (at least for a year, until the membership fee kicks in).

Vertu has plenty of interesting little features, but perks and sparkle alone do not make up a brand. The Vertu was created to connote discernment, taste and design. At the moment, its smorgasbord of promises is not groundbreaking enough to tantalize. Its craftsmanship offer is couched in technological fixes and its luxury promise is expressed in expensive coverings or simple, unremarkable service. It is part Rolex, part BMW, part Jeeves.

The Future for Vertu
As Peter Ashall, President of Vertu, states, Vertu wants to introduce “an entirely new category in mobile communications.” One senses that Vertu is onto something hot, but that it currently exists as a proposition without the central catalytic idea that will bring this ambition to fruition.

Nokia’s decision to create a new brand for this venture makes sense from a business point of view. More importantly, the new brand enables the creation of an internal culture that is markedly different from that of Nokia’s – crucial if Vertu’s departure from the current debate is as significant as it claims to be.

Vertu needs to demonstrate that the crux of its brand lies beyond the safe haven of Nokia’s technical and style credentials. Its opportunity for success relies on true conviction that it is creating something new: philosophically rooted in the tradition of excellence, but strategically visionary. The luxury aspect of the brand will follow if it manages to be as different as it professes to be. To do so, it needs to be revolutionary in inspiration, fresh with respect to the category, and, above all, defiant in approach to given norms. In short, more Vreeland than Van Cleef & Arpels.