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Tuesday, April 14, 2009

Finnish cell phone maker targets well-heeled with luxury handsets


Staff writer

The mobile phone made of platinum and black ceramic has a sapphire crystal display and a scroll key made of a diamond. The most expensive model in the shop in Tokyo's Ginza district costs ¥6 million.

News photo
Off the hook: Yoichiro Ban, president of Vertu, shows off some of his company's luxury mobile phones at the company's store in Tokyo's Ginza district on April 2. YOSHIAKI MIURA PHOTO

Some models in the lineup, including cell phones made of titanium, gold and ceramic, are displayed in showcases, as if this were a jewelry shop.

Vertu, a luxury brand of Finnish cell phone giant Nokia, opened its first flagship store in Japan on Feb. 19. The shop, which occupies the entire four-story 329-sq.-meter building, is Nokia's 19th flagship store worldwide. It comes almost 11 years after Vertu was created and went on sale at boutiques, luxury watch shops, jewelry shops and department stores in 50 countries.

But the opening of the long-awaited shop has been unfortunately timed, coming in a deep recession.

But even amid the recession, Yoichiro Ban, president of Vertu in Japan, is bullish about the luxury cell phone market.

"Our customers are people who have nothing to do with the status of the economy," Ban told The Japan Times in a recent interview.

"They are a success and people who care what they use and are able to buy such handsets," he said, sitting on a spacious leather sofa in the customers' lounge on the second floor of the newly opened store.

Ban declined to release sales figures since the store's opening, citing Nokia's policy of not disclosing such figures.

"But we can say 'a significant number of handsets' have been sold so far," he said.

Luxury mobile phones such as Vertu are unique in the world.

Other than Vertu, Softbank Mobile in November sold eight limited-edition phones, each studded with 537 diamonds from Tiffany and Co. The phones, designed by the luxury New York jeweler, went on sale at about ¥12.98 million each.

In Vertu's case, the phones are not limited editions.

The Ginza shop is initially offering 15 handset models, including a ¥6 million platinum model and a handset with the crest of Italian sports car maker Ferrari. The cheapest phones at the shop cost ¥670,000.

Also, a concierge service that comes with the phones will start in May, along with e-mail and other services.

By hitting a key on the ritzy handsets, customers can be connected to the service for 24 hours a day, available in Japanese or English, to make reservations at restaurants and hotels as well as to buy tickets for travel and entertainment.

Some celebrities are known as Vertu customers. They include former U.S. President Bill Clinton and Japanese street fashion designer Nigo.

However, analysts are cautious about the prospects of Vertu in Japan.

"It is hard to expect Vertu to become a megahit," said Makio Inui, a senior analyst at UBS Securities Japan.

"I understand that Vertu aims at a luxury product that makes users feel special — something similar to jewelry," Inui continued. "But there are some services that Japanese users definitely require (and Vertu does not provide)," he said. Such services include "one seg" (one segment) digital TV broadcasts and "electric wallet" wireless services.

Japan's mobile market is often dubbed "the Galapagos" because it has developed differently from overseas markets, analysts said. They say Nokia's failure to gain a major market share was one reason that prompted the Finnish maker to announce in December it was withdrawing almost its entire business from the Japanese market, except for its Vertu brand.

"Mobile users in Japan demand more than those in Europe and the United States," Inui said. "Those who like to have something new may buy Vertu. But in most cases, they will buy it as their second phone."



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