Nokia plans to sell Vertu, its luxury phone line, instead focusing on its new Windows-based phones to help stage a comeback in the smartphone market.
Vertu luxury mobile devices are custom-made, often encrusted with diamonds and other jewels, and boast a lifestyle concierge button that assists users with exclusive services like restaurant and hotel reservations, priority bookings, and a global recommendation network.
The Vertu brand is performing well, but Nokia is in the midst of restructuring, hoping to improve its fortunes with a new line of highly-anticipated Microsoft Windows-based Lumia phones. The Finnish phone-maker is struggling to catch up in the highly competitive U.S. smartphone market, and the pressure is on the Windows phones to draw customers to its brand.
Part of Nokia's comeback strategy is targeting first-time smartphone buyers with affordable, user-friendly devices. Vertu phones, however, are targeted toward the rich and famous, with prices starting at around $5,000 and ranging into the hundreds of thousands, and such extravagant phones no longer seem to fit in with Nokia's new business strategies.
Accordingly, Nokia shut down all Vertu boutiques in Japan last summer, the first signal of the approaching changes.
The sale of Vertu, which will reportedly be handled by Goldman Sachs, will allow Nokia to channel its efforts into building the success of the Lumia phones, a better vehicle for the company if it wants to emerge as a relevant competitor in the smartphone world.
The Lumia 800, which debuted in London in November, is already routinely selling out in U.K. stores, a good sign for Nokia.
Further, revenue gained from the sale of Vertu could also fuel a marketing blitz for the U.S. launch of the Lumia line, expected in early 2012.
Customers who can't live without ruby-encrusted cell phones have no need to fear. Vertu has 90 boutiques in 70 countries, with lucrative markets in Russia, Asia, and the Middle East, and the company plans to remain operational.
Meanwhile, selling Vertu will enable Nokia to focus on its best chance for a major comeback, and channel its energy into new business strategies.
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