For most people, the thought of spending £25,000 on a mobile phone would be considered a bit of a joke. And not a very funny one at that.

However, the market for such a super high-end luxury product does exist. And it’s fast-growing Hampshire-based company Vertu that meets the international demand.

With such stratospheric prices comes an expectation of the highest-quality gems, precious metals and exotic skins. That requires specialist materials knowledge, hand-crafting techniques and guaranteed traceability of all parts. So, while producing such expensive consumer items might seem a tad ostentatious, it does require rigorous manufacturing and assembly processes.

“The best luxury goods are rooted in sound engineering principles,” says Hutch Hutchison, head of design at Vertu. “Indeed, every phone we make has something like 1,200 components, and it involves the handling and integration of some unique stones and precious metals. In this sector, we have to combine the best in terms of craftsmanship, performance and service. And our engineers are crucial to that offering.”

Profitable niche

Vertu is something of a surprising success story in a global market dominated by leviathans such as Apple, Samsung, LG and Sony. Set up in 1998, originally by Nokia but now owned by a private equity group, it has carved out a lucrative niche making ultra-luxury phones for high net-worth individuals. 

The phones range in price from £4,200 up to around £24,000, or even higher for one-off personalised handsets. The single highest price for one of its phones is reportedly a staggering £230,000.

The business has grown steadily to employ 500 people at its headquarters in Church Crookham in Hampshire, with another 400 staff dotted around the world. It makes around 40,000 phones a year, and its handsets are available from 500 stores, in 66 countries, with particularly strong sales in countries such as China and Russia, and in the Middle East.

“We are a complicated and diverse company,” says Hutchison. “We do everything from learning about how to grow a piece of sapphire through to working out shipping arrangements to get exotic skins across borders. We are then a manufacturing business. And then a retail business, with a significant service part to that. There isn’t a bit of the chain we don’t end up touching.”

The phones themselves are based on the Android operating system, using a quad-core processor with 13 megapixel camera. “It’s a very sound spec,” says Hutchison. But the real differentiator is the novel materials used in construction, and the hand-made nature of the manufacturing process. 

Metals range from grade 5 titanium through to solid gold, while precious stones like ruby are used for bearings, and sapphires for keys. Vertu says it uses the best tanneries in the world, selecting skins such as alligator, ostrich, water-snake and lizard for exotic backing surfaces.

The phones aren’t decorative pieces, says Hutchison. “These are not bling, they are pieces of engineering,” he says, as he throws one to the ground to prove its rugged nature. “We build beautiful phones. But they are strong phones, too,” says Hutchison. 

“We select some great materials, but if you use them in the wrong way they don’t yield any benefit. In fact they can be quite detrimental. That’s why we employ numerous materials scientists and engineers.”

A tour around the production facility starts off as it might at any other mobile phone maker – with sight of a reliability laboratory that tests the performance of new models. Automated test cells whirr in action as they twist and turn components through thousands of cycles, while prototype handsets are put through extreme heat and humidity conditions. Meanwhile, anechoic test boxes are used for acoustic tuning.  

But any similarity with the sorts of places that make mass-produced phones ends there. The production floor at Vertu isn’t characterised by huge banks of automation, because the process of assembling handsets is largely done by hand. 

Craftsmen and women work in cells, carefully selecting tiny components, before studying them with eyepieces or magnifying glasses and positioning them in the required place. In one cell, a worker uses tweezers to select shimmering sapphires, while in another stingray cartilage is carefully coerced into a titanium enclosure. 

At the end of the process, the name of the person responsible for the build of the phone is etched within the interior. “Some clients specifically request a certain member of the manufacturing staff for their phone,” says Hutchison. “We also have a special products division for more individual personalisation which can involve ultra-high price materials. A one-off phone can take many days to make. Some materials, like platinum, are really difficult to handle. It is awfully difficult to polish.”  

At the end of the process, full diagnostic tests are conducted, before a final visual inspection is carried out and the products are carefully packaged and despatched. “There’s a lot of hand crafting all the way along the line. It’s much easier to scale up the people than it would be the automation,” he says.

In terms of expansion, phones using new skins such as ostrich are coming to market. Hutchison says the brand inspires loyalty among wealthy individuals, many of whom collect handsets and compete with each other for additional personalisation, such as the etching of family crests. 

Vertu is also attempting to extend its product offering by starting to make a range of audio accessories, again aiming at the very top end of the market.

New software improves design process 

When Tim Draper arrived at Vertu three years ago, the company’s product development processes were in a bit of a mess, with highly bespoke legacy CAD and Product Lifecycle Management systems hampering the way that its engineers worked. “We had instances where lead engineers would look at an assembly model, call a review meeting of the team, open that model, only to find it was in a different state because someone somewhere had put in new data in a half-dressed manner. It was a mess. 

“We really found that everyone working, all at the same time, all on the same model, just didn’t suit the way our development cycle was phased. We had to change.”

As CAD manager, Draper was charged with overseeing a revamp of all Vertu’s digital design and development processes. He looked at the various packages of software on the market before opting for a product data management, CAD and e-commerce solution from US-based provider PTC. The main requirement was to be able to collaborate and work more efficiently, both within the firm and along the supply chain. 

The PTC package gave Vertu greater control over the product design process, allowing technology partners to work on the firm’s CAD models in a more structured manner. 

“Our suppliers needed to be able to work with us as if they were members of our team,” says Draper. “We have partners in places like Asia who can work with our people on models with a much higher degree of integration. That’s been a sea-change. No longer are we throwing files over the wall and then getting them back and spending two days reconciling each other’s changes.” 

Moving on from that, internally Vertu’s CAD data was managed from a completely separate environment to the rest of its product data. “That needed to be resolved too,” says Draper. “We needed to bring CAD data into the same environment as our other functions and processes.”

The PTC software also helped to optimise workflow. “We can now launch fully managed engineering change processes,” he says. That has increased the speed at which Vertu can bring new products to market.