Nokia Corp., the world's largest maker of mobile phones, reportedly plans to sell one of the jewels from its crown: Vertu unit that sells luxurious mobile phones. The move would provide Nokia additional money to strengthen its competitive positions on the market of smartphones.
Nokia reportedly has appointed Goldman Sachs to oversee the sale of its Vertu unit, according to Financial Times. It is unclear how much money does Vertu cost, even the annual revenue of the mobile phone maker is unknown for sure and is believed to be between €200 million and €300 million ($268 million and $402 million). It is also unclear which companies may be interested in such an acquisition, but some believe that there had been interest from private equity groups as well as owners of luxury brands, such as LVMH.
The reasons why Nokia wants to sell one of its profitable business units are unclear. One of the reasons could be that sales of Vertu luxurious handsets dropped significantly during the global economic downturn in 2008 - 2011. Another reason could be dropping popularity of such handsets as customers started to demand advanced features in addition to expensive materials and other distinctive features of Vertu cell phones.
Given the fact that Vertu unit is most likely profitable, it is not cast on stone that Nokia will actually proceed will selling it off unless the deal provides a lot of cash for the money-losing phone giant. Since Vertu phones rely on hardware platforms developed by Nokia, it is also likely that the future owner will also depend on Nokia in many ways, but the Finland-based company will not be able to benefit from huge profit margins that it enjoys nowadays.
Vertu was established in 1998. It is based in the UK and its phones are sold in 60 countries. In addition to precious metals used to make the phones, Vertu handsets also offer concierge service that allows to book and find restaurants, hotels, cars, etc.
Nokia and Vertu did not comment on the news-story.