Nokia plans to sell Vertu, fund smartphone business with profit
Finnish phone maker Nokia is considering selling Vertu, its subsidiary that manufactures luxury smartphones. According to reports the firm will use profits from the sale to finance its smartphone business
Nokia is ready to spread its wings in the smartphone manufacturing business and concentrate on building bigger, better devices. According to the Financial Times, it hopes to do this with the profit it rakes in when it sells of its subsidiary Vertu.
Though no time line for the sale has been fixed and an asking price for Vertu is still undecided, Nokia and its analysts are seriously considering the sale and crunching the numbers. Vertu caters to a niche market but does so quite profitably. In fact, its annual profits lie between 200 – 300 million Euros. Goldman Sacs is helping Nokia with the sale and so far, a number of luxury brands and private equity groups have shown an interest in its subsidiary.
Nokia’s smartphone business is not doing as well as the company had hoped. Sales of its smartphones have just been given a push with the powerful Lumia series, but before that, Nokia had been in the sidelines of the market. With a big profit guaranteed by Vertu’s sale, the company is hoping to put in time and resources to develop smarter phones that are capable of competing with the likes of Apple. Nokia’s partnership with Microsoft is well known.
Time, research and development are indeed what Nokia needs in order to make a huge comeback in the smartphone market. The company is capable of a number of new and improved devices, as is evident from the successful launch of the Lumia series. Nokia has always been popular among cellphone users; hopefully, it will gain the same respect in the smartphone business in the coming years.