Vertu: An Internal Nokia Start-up Creating the Luxury Mobile Phone Industry

Abstract

Vertu was the first luxury mobile phone vendor, created by a team of British engineers working at Nokia during the Finnish company’s heyday of the early 2000s. Vertu created a new market space by giving birth to a new product category that borrowed elements from the mobile phone industry and the luxury jewelry industry. By introducing a new concept of mobile phone characterized by craftsmanship, precious materials, and exclusive services, Vertu challenged the functional orientation of the mobile phone industry, making the handset an emotional device. However, a population of start-ups as well as established brands soon entered the industry attempting to replicate Vertu’s success. This chapter examines how Vertu was able to create new demand and the main challenges it faced with the iPhone revolution.