View Full Version : Market growing for luxury gadgets

07-30-2006, 12:50 PM
Jewel-encrusted gadgets are standard equipment for a certain kind of wealthy celebrity. Supermodel Naomi Campbell allegedly threw her glittering BlackBerry at a maid earlier this year. And Paris Hilton frequently poses for pictures with the latest pricey gizmos.

But now the everyday wealthy — or those who aspire to join their ranks — can get their hands on gilded, bejeweled luxury electronics.

After all, it's one thing to own a Motorola Razr — when the phone came out in 2004, it had a $500 price tag, and now Motorola has sold 50 million of the sleek phones, which Verizon Wireless offers for $70. But it's another thing to own a $600 golden Dolce & Gabbana fashion Razr handset, which went on sale in July.

The Razr paved the way for Nokia to sell its $900 8800 slider phone, adorned with glass that Nokia says is "used in luxury timepieces."

"It wouldn't be too ridiculous to say some of these phones are for the rapper girlfriend and heiress demographic," says Current Analysis analyst Avi Greengart. "But there's definitely a broader market too — the margins in this space are huge, and it's a growing category."

The fact that Nokia's luxury phone subsidiary, Vertu, has stayed in business for four years and expanded its product line is proof that the luxury phone market is gaining steam and succeeding, says Greengart. While Nokia doesn't break out revenue for Vertu, the company says its sales and units shipped tripled from the first quarter of 2005 to the first quarter of 2006. The $5,700 Ascent pink leather edition is the company's top seller, accounting for 30% of all Vertu units sold.