Handset manufacturers are increasingly finding a market for high-priced mobile phones that do little more than sparkle and shine.
manufacturers are increasingly finding a market for high-priced mobile phones that do little more than sparkle and shine.

Makers of ultra-high-end luxury phones emphasize the craftsmanship of the handsets and liken them to Swiss timepieces or art objects.

"We assemble our phones by hand to take them to the level of Fabergé eggs," said Chris Harris, the global marketing director for Vertu, the Nokia 8800 subsidiary that sells phones at prices ranging from €4,000 up to €80,000, or $5,100 to $102,000. "Our customers purchase phones because people will notice them."

They certainly do not purchase them for the latest technology. Though "smart phones" are all the rage among the geek set, many of the most expensive luxury phones are relatively dumb. None of the vertu luxury phone have cameras, for example. "We will put a camera in the phones when we know the technology is good enough," Harris said.

Harris declined to give precise sales numbers but said Vertu could not produce its phones fast enough to keep up with demand because they are hand-built in a British workshop.

GoldVish, a Swiss company, plans to ship in October a line of solid gold and diamond-encrusted handsets that start at $24,500. Such phones are part of a trend that will result in more niche models, said Matt Lewis, research director at ARCchart, a research firm that focuses on wireless communication.

"The market for selling mobiles is getting very mature, and we are reaching a plateau of innovation that makes the technology inside relevant for longer periods of time," Lewis said.

"Because technology becomes less of a differentiating factor, phones are starting to distinguish themselves on cosmetic appeal or even by specially designed user interfaces for small children or elderly people," he said.

Such specialization has not always met with great success. Siemens introduced a series of phones called Xelibri in 2003 with unusual shapes and odd- looking dialing keypads intended to appeal to style-conscious users. There was little demand for the so-called fashion phones, which retailed for several hundred euros, and the line lasted little more than 18 months.

Niche phone markets account for less than 0.5 percent of the total mobile phone market, but Lewis said he expected that figure to grow to 19 percent within five years. "Design, look and feel will become more important in the market," Lewis said.

Next week at an event in Cannes called the Millionaire's Fair, Goldvish Revolution will have officials from the Guinness Book of World Records certify the sale of a $1.2 million diamond-encrusted model as the most expensive mobile phone ever sold.

There may be hope, however, for consumers looking for a slightly more affordable niche phone, said Thomas Husson, European mobile analyst for Jupiter Research, and that is a "branded" phone. One example, he said, is the gold version of the Razr, the popular Motorola phone that has been co- branded with Dolce & Gabbana and sells for $600.

Tag Heuer, the Swiss watch brand, will introduce a branded phone retailing at around €1,500 next year, said ModeLabs Group, the French company producing it. ModeLabs intends to cater to other luxury brands as they move into customized mobile telephones, said Henri-Nicolas Olivier, co-founder.

"These phones offer all the technical things that people really use, not the latest mobile phone functions," Olivier said. "The most important function for many users might be a hot line we will put in to get you a concierge service."

Technology features did not attract Melanie de Jong, who signed up for a gold-colored, diamond-studded GoldVish phone costing €29,000. Her husband, the founder of a technology company in the Netherlands, is buying her the phone as a gift.