Cell phone prices can be a little hard to figure out because they're often part of a service usage package. For instance, a basic phone might be priced as "free" if a buyer commits to a certain service period, two years, say. That said, a cell phone without lots of features might well cost someplace in the range $100-$200.

In contrast, there's the Vertu cell phone line where prices are in the thousands -- many, many thousands of dollars in some cases.

As the Wikipedia link above reports, Frank Nuovo, Nokia's head designer (at the time) was instrumental in creation of the Nokia-bankrolled company; now he serves as head designer at Vertu. The Vertu web site's history page stresses technical innovation related to the "package" -- not the electronic guts -- and the use of precious, luxury materials in some models.

[Image]Vertu cell phone with Ferrari motifs

I had never heard of Vertu until a few years ago while strolling through the shop arcade at the Wynn hotel-casino complex in Las Vegas. Right there amongst shops for Chanel, Manolo Blahnik and the like was a Vertu store. The phones on display were attractive and their prices astonishing. I assumed Vertu wouldn't last, yet the store remains: I saw it last month while in town.

Here's my problem with Vertu. Cell phones are still part of a rapidly-evolving corner of technology and marketing. The technology goes from Gen-This to Gen-That every few years. Not to mention the evolution towards multifunctionality: consider inclusion of cameras, the tiny-keypad Blackberry and Apple's multi-app iPhone. Vertu thus far remains a pretty basic cell phone if all the fancy construction and luxury touches are set aside. So a buyer forks out thousands of dollars for one and a year or two later yet another Gen-jump occurs. So what does he do? Keep his luxury item while lagging capability-wise? Or does he spend more thousands for a newer version? I suppose folks who are utterly rich would do the latter without much thought. They might even upgrade so as to have a Vertu with a different décor than that tiresome one purchased last spring. After all, a Vertu phone is all those luxury touches I set aside earlier in this paragraph.

An interesting thing about luxury items is the price multiple over a similar item offering the same core functionality. For automobiles, the ratio can be ten or 20 to one -- a Maseratti Quattroporte goes for about ten times as much as a really cheap, small Korean-made car and some Rolls-Royces for double that.

Ratios are much higher for wristwatches. A cheap watch with a digital face can be had for only a few dollars whereas a middle-line Rolex sells in the thousands. But watch technology and functionality are pretty stable, so a wristwatch purchase can be considered akin to buying jewelery. I suppose the same can be said regarding Vertu, though the functional foundation is far softer.