As Apple and other major smartphone makers are making buzz around the world for their latest flagship devices, U.K. based premium smartphone maker Vertu collapses.
Vertu has announced that it will stop manufacturing products as liquidation of its assets begin–a move that will leave 200 employees jobless. The company was first established by Nokia in 1998 until the company sold it to the Swedish private equity group EQT VI for an undisclosed amount.
Vertu phones are known for its hefty price tags, with its Signature range starting at £11,000 or approximately $14,000. It was reported that one of its phone models that features 18-carat red gold costs a staggering £39,100 or $50,732.
A spokesman for the company confirmed to BBC about the liquidation, saying:
“Well it’s gone into liquidation and I’m not being paid by them anymore.”#Vertu collapses, will leave 200 employees jobless.Click To Tweet
In its 20 years in the phone manufacturing industry, Vertu was only able to sell over half-a-million phones. A figure way behind premium phone makers like Apple which celebrated its ‘one billion iPhones’ last year.
The Fall of a Luxury Empire
In 2015, EQT VI sold its share of Vertu to Godin Holdings, a Hong Kong-based company. Its current owner, Murat Hakan Uzan, a Turkish exile based in Paris, acquired Vertu in March from its former Chinese owner.
A report from The Daily Telegraph stated that Uzan planned to pay £1.9 million to bring the company out of administration, but it had an accounting deficit of £128 million.
The plan floundered in the High Court on Tuesday.
A spokesman for Vertu said: “Our best efforts to achieve a pre-pack administration have failed because the financial requirements specified within the negotiations went beyond the point where the new company had a chance of financial viability,” further adding that no other part of the group is affected by the most recent development. While Vertu collapses, Uzan will still retain the brand, technology, and licenses.
According to Ian Fogg, an analyst at IHS Technology, the fall of Vertu has something to do with the brand using synthetic sapphire for its screens and the rise of other companies offering customized phone services. Referring to synthetic sapphire, Fogg told BBC: “It is a difficult material to work with.”
In 2013, Apple signed a $578 million sapphire deal with GT Advanced Technology that leads to the speculation that the smartphone company will use sapphire in its iPhone screens. However, GT Advanced went under, and the only thing covered by sapphire in an iPhone is its Touch ID fingerprint sensor and rear camera lenses.