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Vertu, Phone-Maker To the Rich, Says It's Broke (gizmodo.com)
A British-based luxury phone maker which made its name selling $50,000 smartphones decked out in alligator leather and titanium and fitted with sapphire screens, has applied to the courts to be placed in administration after running of out money to pay staff and suppliers, (paywalled) reports British outlet The Times. In a witness statement filed in the High Court in London yesterday, the report adds, the company's last remaining director Jean-Charles Charki, said that Vertu was insolvent and unable to meet its June 30 payroll obligations of about 500,000 euros. From an earlier report: According to a juicy new report in the Telegraph, employees are worried about the future of the company after noticing that production had been running at reduced capacity. Employees are apparently worried about their unpaid wages, as well as pension contributions taken out of their paychecks without being added into the company's retirement fund. Sources inside the company also told the Telegraph that Vertu has unpaid debts with suppliers such as Qualcomm and Microsoft, and bills from waste management, pest control, and other property services.
Wouldn't this be fraud? Punishable by jail? Well, if we actually jailed non-brown people the way we jail brown people...
I will give them credit for phones that look sharp and a different style as compared to the minimalist design that we are seeing on smartphones. They also have a nice Android skin as well.
However, of all things out there, electronics that are not "timeless" are not really status symbols past a certain point. Even Apple learned this with the Apple Watch Edition, which its five digit price tag apparently didn't have many takers since Apple wound up killing it, and moving the name to a ceramic model with a price an order of magnitude less.
Electronics are not exactly the top dog for conspicuous consumption. The expensive smartphone of today would be a laughingstock six months from now when the latest models come out. Especially without another brand to attach it to. If a smartphone had a built in remote and key for a Bugatti, it might command a price premium. However, Vertu's name is recognized, but it isn't recognized enough to be worth the cost.
Vertu definitely has a niche. If they sell the same products for the same price, but buy a license to use supercar logos or something with horse racing, they would have products that would be purchased. However, smartphones are something that might be used for 6-12 months and then tossed.
Another possibility would have been to do like Louis Vuitton and make cases for existing devices. Supposedly, the quad-digit Eye-Trunk by LV sells like hotcakes, especially as part of a general accessory set.
They have about a thousand employees.
Their vacuum tube supplier went out of business.
If you've never heard it before though, you really should. The sound is amazing. So much warmer than those digital cellphones.
CEO earns $480,000 per month. Everyone else earns $5000 per month.
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