Lux­ury phone maker Vertu sold to Chi­nese in­vestors

China Daily (Canada) - - ACROSS CANADA - By GAO YUAN gaoyuan@chi­nadaily.com.cn

The Chi­nese smart­phone fam­ily, long known by its av­er­age-qual­ity and in­ex­pen­sive de­vices, is all set to wel­come a new mem­ber. Only, the new en­trant is a cut above the rest as its ma­jor cus­tomers are nat­tily dressed busi­ness­peo­ple who sport cus­tom­ized gad­gets hand­crafted with sap­phire crys­tal screens and high-end leather.

The United King­dom­based lux­ury smart­phone ven­dor Vertu Co Ltd was sold by its Swedish owner EQT Hold­ings AB to a group of un­known in­vestors in Hong Kong.

EQT said the own­er­ship change was com­pleted in mid-Oc­to­ber. De­tails of the trans­ac­tion, in­clud­ing the amount, were not dis­closed.

Cas­par Caller­strom, an in­vest­ment ad­viser to an EQT divi­sion that han­dles the Vertu ac­count, said the lux­ury brand is op­er­a­tionally stronger to­day with a lead­ing po­si­tion in the lux­ury mobile phone mar­ket dur­ing EQT’s ten­ure.

“Vertu is now ready to take the next step in its de­vel­op­ment to­gether with a new owner,” Cas­par said.

The pri­vate eq­uity

firm ac­quiredVertu fromNokia in 2012 for more than 200 mil­lion eu­ros ($220 mil­lion). The phone maker sub­se­quently changed its op­er­at­ing sys­tem from Sym­bian to Google Inc’s An­droid and launched a range of new prod­ucts.

How­ever, the price ofVertu de­vices far ex­ceeds the flag­ship de­vices sold by Ap­ple Inc or Sam­sung Elec­tron­ics Co Ltd.

Prices for a Vertu phone eas­ily reach 50,000 yuan ($7,900) in China, com­pared to 7,788-yuan price tag for the most ex­pen­sive model of the iPhone 6S Plus sell­ing in the coun­try. Vertu pro­vides 24-hour world­wide concierge ser­vice to its phone users to ac­cess “money-can’t-buy” events and ex­pe­ri­ences.

The com­pany runs re­tail out­lets in high-end shop­ping malls in ci­ties in­clud­ing Bei­jing and Shang­hai. Chi­nese shop­pers’ zeal for lux­ury prod­ucts has been driv­ing Vertu’s ex­pan­sion.

Vertu, which was orig­i­nally started by Nokia in 1998, will need to find a new chief ex­ec­u­tive fol­low­ing the change in own­er­ship.

Mas­si­m­il­iano Pogliani, the com­pany’s chief ex­ec­u­tive for three years, is be­lieved to have stepped down from his post.

It was also not im­me­di­ately clear as to how the own­er­ship change would af­fect Vertu’s op­er­a­tions. Hong Kong-based in­vest­ment com­pany Godin Hold­ings, a key in­vestor in Vertu, did not re­ply to e-mails sent byChina Daily seek­ing com­ments.

Vertu’s Hong Kong of­fice said the com­pany would is­sue a state­ment re­gard­ing the own­er­ship and lead­er­ship changes on Wed­nes­day. But no state­ment was made byWed­nes­day evening.

Hong Kong in­vestors have showed a rare in­ter­est in buy­ing over­seas smart­phone mak­ers lately.

REX Global En­ter­tain­ment Hold­ings Ltd, a Hong Kong-listed firm, paid $100 mil­lion for 64.9 per­cent stake in Rus­sian smart­phone maker Yota De­vices last week.

TZ Wong, a se­nior an­a­lyst at Sin­ga­pore-based re­search com­pany Canalys, said Vertu is fac­ing strong head­winds be­cause of its pric­ing strat­egy.

“The pre­vi­ous owner chose a good tim­ing to exit as Vertu is fac­ing ex­pan­sion pres­sures,” he said.

“The com­pany may shift its fo­cus to China and other Asian mar­kets af­ter the takeover.”

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