Vertu's story is a sad one because it was a pioneer brand in the luxury tech sector. Vertu, like many other mobile phone brands, such as Nokia, faced serious market disruptions when Apple, revealed its first iPhone in 2007. Android quickly imitated Apple’s iOS, and it provided its operating system freely to mobile phone manufacturers. This new situation, as a combination, disrupted the whole mobile phone industry.
Previously, Nokia was the overwhelming market leader in the mobile phone industry. It was the Coca-Cola of mobile phones. The Symbian operating system, used by Nokia and many other brands, was the most popular operating system in the market, and it was praised that it was the most sophisticated one. Therefore, Vertu, founded in 1998, decided to use Symbian as its operating system. The first Vertu phone was released to the market in 2002, and it had a vast number of high-end features from its extraordinary craftsmanship to online services, such as The Vertu Concierge. Vertu even introduced evolutionary technology, which kept its devices updated with the latest technological improvements.
“Vertu not only reinvents an object, but it also reinvents an experience introducing an entirely new category in mobile communications," states Peter Ashall, President of Vertu. The experience begins from the moment of acquisition, for the instrument is only available through Vertu Galleries and by personal appointment at Vertu Private Client Suites, located in some of the most elegant shopping areas around the world. The signature collection announced January 2002 will be available in a range of exclusive material options including casings in platinum, 18-carat white gold, 18-carat yellow gold and stainless steel. Future collections will offer additional options for customization. Vertu uses its network of artisans and craftspeople to ensure that the product is crafted at the highest levels of quality.” - Vertu press release 2002
But what happened?
Luxury consumers are extremely demanding, and many of them are using Apple’s tech products because they are receiving the best experiences from Apple devices. In contrast, Vertu decided to use Symbian for many years, although consumers were increasingly using Android and iOS. Vertu even tried to use Windows Phone in 2013 but it was too complex. Therefore, Vertu decided to choose Android, which is by a performance of the second-best operating system in the market. This strategic became also too late. Consumers were already excited about Apple and Android.
From a strategic point of view, this was extremely problematic for the brand because you must provide the best choices for luxury consumers, not the second-best. Apple, a premium brand, was able to lure luxury consumers by providing the most sophisticated operating system, and there are accessory brands, which can provide cases for smart devices, hence, devices were effortlessly “upgraded”. Vertu's physical designs were still very high-end but the main problem was with its operating systems, especially during the last years. Android could not provide a high-end user experience for luxury buyers. As we know that Android is the only choice for independent manufacturers because Apple does not give its OS for other brands. Hence, therefore, Android should have provided a luxury version of its operating system with various functionalities.
What can we learn from Vertu’s case? Do not try to compete in the luxury technology sector with second best software choices if you want to sell devices, which are handcrafted from the high-end materials. Softwares are not luxury because tech loses its value in the long-term but hardware designs are luxury. Still, software choices must be the best ones because otherwise, we will see new Vertu examples in the future.
Published in Luxury Sales Academy.