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Why Making a $6,000 Smartphone May Not Be Crazy After All

It?¯s easy to make fun of Vertu replica.

In case you?¯re not familiar, Vertu replica is a maker of luxury mobile phones. And by ?°luxury?± I mean models that cost anywhere from roughly $6,000 all the way up to $12,000 (and well past that, for special orders that can go into the mid-six figures). What drives those looney-tunes prices? Materials and craftsmanship, mainly. Sapphire crystal faces instead of Gorilla Glass. Titanium bodies (or gold, or platinum) instead of plastic or aluminum.

Here?¯s the case against the company: They?¯re just making bejeweled versions of ordinary smartphones. Their products are gaudy, silly things that offer no functional advantage over an iPhone, a Galaxy S4, or many other smartphones on the market. They are designed for, and purchased by, status-obsessed arrivistes who have more money than sense.

It sounds like a recipe for failure, except for one thing: Vertu?¯s sales figures keep going up. ?°Either there are a lot of crazy people in the world or, I would suggest, there are a lot of different people in the world,?± says Vertu?¯s chief executive officer, the fabulously named Massimiliano Pogliani. ?°There are people who appreciate certain things, and there are people who do not. And if you do appreciate this sort of thing, and you can afford it, then it?¯s your choice how you spend your money.?±

Vertu won?¯t release specific numbers, but it does confirm that its sales have grown in nine out of the past 10 years. (The one year that disappointed the company was 2008, which was a year that disappointed a lot of people for a lot of reasons.) The company?¯s expecting a further uptick in sales now that it has a second, less-expensive (relatively speaking) smartphone in its lineup. The new phone, the Constellation, retails for $5,950 in the U.S. and joins its more-expensive brother, the Ti, which costs about $12,000.

Having two smartphones is a big deal for the British-based company, which used to be a part of Nokia (NOK) but was spun off and picked up by Swedish private equity firm EQT VI in 2012. Until the Ti was introduced earlier this year, Vertu had no smartphone at all. You could spend as much for a platinum Vertu Signature phone as many people would on a house, but all you were getting was a feature phone that was little different in function than what you could buy from Motorola in 1999.

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