Nokia plans to sell off Vertu

Nokia is looking to shed off its luxury subsidiary and maker of the world's most expensive mobile handsets, Vertu, and has appointed Goldman Sachs to oversee the sale process. Private equity groups are said to be interested, but talks are still in its early stages.

According to a report Thursday by the Financial Times (FT), the news agency cited a source familiar with the process that Goldman Sachs had been appointed to overlook the entire sales process and talks were still at an early stage. Vertu has yet to be given a value, but its annual revenue is estimated to be between 200 million euros (US$268 million) and 300 million euros (US$402 million).

Another "person with knowledge of the business" told FT that there had been interest from private equity groups, and luxury goods brands were likely to be keen, too, given its emerging customer base and potential for cross-selling.

Vertu was created by Nokia in 1998 to tap a niche market for mobile devices priced similar to luxury watches, the report noted. Each phone costs upward of 200,000 pounds (US$314,000) partly because of its precious metal components, it said, adding that there are Vertu outlets in more than 60 countries, with the strongest consumer interest in Russia, Asia and the Middle East.

While Vertu has been performing well, reportedly delivering double-digit sales growth in 2010, it has little overlap with the wider Nokia brand, which is in the midst of internal restructuring and change in strategy with the adoption of Microsoft's Windows Phone platform for its high-end smartphones.

The use of Redmond's software has not been extended to Vertu phones, the FT report stated.