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Apple and Samsung may be gung-ho about the opportunities India offers, but for the makers of those exclusive luxury cell phones trimmed in gold and studded with precious stones, the market has yet to come of age. Luxury brands such as Vertu, Mobiado and Lamborghini haven't been able to fully tap the buying potential of that 'quintessential high heeled consumer' here.

The problem is not shortage of demand alone. Regulatory issues, lack of appropriate retail environment, high import taxes, smuggling, after sales service and failures on part of the local distributors, say people dealing with luxury goods, have kept the market for such embellished handcrafted pieces very limited and under-promising.

"We are doing only 30% of what we aim to do," said Charu Makin, director of Navshiv Retail, a Delhi-based retailer that has exclusive rights to market and sell Mobiado phones in India. It has been facing issues over customs and retail locations.

Makin didn't disclose the sales numbers of the phones that are priced between Rs 1.5 lakh and Rs 7.5 lakh in India. She said if a brand like Mobiado is able to sell even 300 pieces a year in this country, it would be "good".

Mobiado has been planning to launch in India in March last year, but the first consignment was held back by the customs department on the back of some technical reasons, Makin said. "We fought a legal battle against the customs department and issues still exist."

There had been plans to launch the Lamborghini branded cell phones in India, but those have been shelved for now.

The global licensee for Lamborghini phones had tied up with Luxury Quotient India, a unit of global luxury player LQ Group. "However, the LQ group has put this discussion on a hold currently due to a shift in policy of the LQ group to encourage dealing directly with the brands and not through their licensee partners," said Deepak Kumar, managing director of Luxury Quotient.

According to Industry sources, Lamborghini is currently in talks with a few more Indian players to explore a partnership.

Vertu, one of the firsts to have come in with luxury phones to India, is selling between 300 and 500 pieces every year, each priced upwards of Rs 3.5 lakh, according to people in the know.

"Last year, one of the largest selling handsets of Vertu in India was priced at Rs 7.5 lakh," said Atul Gupta, chief operating officer of Mumbai-based Matrix Distributors, the exclusive Vertu retailer in India.

Citing confidentiality reasons, Gupta didn't disclose the brand's sales volume, but said it was growing in the range of 8-14% in the past couple of years. "The luxury market has been tough, but we are growing," Gupta added.

Vertu, owned by private equity group EQT, makes some of the most expensive mobile phones in the world, with some having sapphire keys and exclusive ring tones played by the London Symphony Orchestra. Like Vertu, most such phone makers position their products in the luxury segments and sell features like titanium/platinum bodies, leather covers, diamond/sapphire embellishments and other fancy services like a five-star rated concierge.

Some of them have also partnered with luxury car makers like Ferrari, Aston Martin and Bentley for co-promotional and co-development to target the same set of affluent clientele. Even brands like Tag Heuer, Dior and Ulysse Nardin sell phones in India, but their success too has been limited, according to retailers.

"Customers look at these phones more from a fashion accessory point of view and not always happy about the technology within which makes it challenging for retailers to sell pieces worth lakhs to a value seeking Indian buyer," said a senior executive working at a multi brand retailer, who did not wish to be identified. Even the after sale service is a major problem in a country like India where the volumes are low, he added.
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