Is There A Case To Be Made For A $10,000 Mobile Phone?

Aesir Copenhagen nearly went under trying to manufacture its first luxury phone, designed by Yves Béhar and priced at $10,000. Now, with a radical handset designed by KiBiSi, the company’s gearing up for a second shot.

Luxury products fall into a few categories. Some are genuinely better than their cheaper counterparts–better in the sense that they will outperform and outlast competitors, thanks to superior materials, more thoughtful design, and more expert craftsmanship. Audiophile gear falls into this first category, generally speaking. Other luxury goods justify their price tag through their effectiveness as status symbols. High-end purses, pens, and watches–while, in many cases, very good at what they’re intended to do–aren’t necessarily going to be markedly better at toting, writing, or time-keeping than significantly cheaper alternatives, at least not in a way that corresponds to the disparity in price. Actually, rather than a set of distinct categories, the world of luxury products is more of a continuum, with products existing at all different places on the spectrum from “actually better” to merely “perceived as better.”


But even as far as luxury products go–a somewhat baffling sub-genre of consumer goods to begin with–the luxury mobile phone occupies a singularly strange existence. The ones we’ve seen thus far are, in many ways, vastly inferior to their more affordable competitors. In some cases, owning a luxury phone means carrying a device that can’t play songs from your digital music library, can’t help you find a restaurant in an unfamiliar city, and can’t even take snapshots–functionality that has been standard in mobile phones for nearly a decade now.

So why would anyone want to buy a $10,000 mobile phone, like the AE+Y, the Yves Béhar-designed from the upstart mobile outfit Aesir Copenhagen? And why would anyone start a company that tries to make them? The easy answer is that there are a lot of chumps out there with more money than they know what to do with. But for Thomas Møller Jensen, founder of Aesir, the idea of the luxury mobile phone doesn’t really have much to do with money. In fact, Jensen doesn’t really think of his $10,000 phone as a luxury product at all. Huh?


The average person, insomuch as any average person actually thinks about these things, would probably put the luxury mobile phone at a dark, remote end of that “better” spectrum. It would end up way out past “perceived as better,” I’d imagine, somewhere closer to “unabashedly worse.” On the surface, the luxury phone might be the most pure form of the status symbol that exists in the consumer electronics world, like Beats by Dre priced for the world’s most ostentatious captains of industry.

But Møller Jensen never thought of it that way. His idea of a luxury mobile phone was one that would be carried for the gratification of the owner, not of his or her acquaintances. Just like someone with good taste and the means to realize it might fill their house with high-end furniture, Jensen thought there might be room in the world for a phone that was, above all else, an unforgivingly beautiful object. What he did not want to build was a phone that was “luxury” for luxury’s sake, the route pursued, with some success, by his main competitor: Vertu.


“For us, that has been a challenge, to try to communicate why we don’t see our products as ‘luxury,'” Jensen says. “Yes, they’re very expensive. Yes, they don’t do anything. But they don’t do anything, in our point of view, for the same reason a Patek Philippe doesn’t do anything. It is just a beautifully crafted–” He catches himself. “Not a piece of art, because it’s not art, but it’s good design, it’s long-lasting, it will continue to be of joy to the user over a long period of time. You won’t throw it away. It’s not a product that screams to others, ‘Oh, I have money,’ or, ‘Oh, I have more money than you.'”

While there’s something undeniably refreshing about a CEO who has the candor to say that his flagship product “doesn’t do anything,” some of the things Jensen’s getting at here do make sense. We don’t deride someone for buying a several-thousand-dollar watch, so why do we have a knee-jerk reaction when we see a mobile phone around that same price point? Or, if you want to look at Aesir’s project in a slightly more noble light, why wouldn’t we encourage an alternative to the every-12-month upgrade bonanza we’re all such willing participants in, even if that alternative is only available to the wealthiest few? What’s so wrong about trying to build, as Jensen puts it, “an alternative to the sea of plastic products”?


Of course, in many cases, the alternatives aren’t really plastic. Indeed, it gets tougher to make the case for “luxury phone as beautiful object” when you look at the fact that many consider their iPhone 5 to be the most beautiful object they’ve ever owned. Whatever one thinks of Apple, it’s definitely to be commended for bringing some exquisitely designed products to the market. Like the Dieter Rams designs that inspired so many of their products, Apple’s recent run has been a rare instance when thoughtful design and mass appeal have lined up perfectly.

But Jensen is right in that we treat our smartphones like “plastic products,” even when they’re made from state-of-the-art Gorilla Glass and finely machined metal. “We have an industry that creates 1.3 billion phones a year that are meant to be thrown away,” he says. In part, what he wanted to do with Aesir was create something that pushed back against the fact, as he puts it, that “all mobile phones, as of today, are basically designed to last between 12 and 18 months.” Granted, it would be disingenuous to say that Aesir’s true concern is saving the planet. If you wanted to keep phones out of landfills, or lessen the demand for rare earth metals (and curb the horrific externalities that often come with them), selling a $10,000 phone isn’t the way to do it. But Jensen’s right about the lifespans of our smartphones today–they’ve never been shorter.


As the devices we carry in our pockets have exploded in their features and functionalities, becoming more like computers than phones, the number of places where they can start feeling out of date have multiplied, too. Around the 12-month mark, our phones’ glossy shells have picked up some dings and their operating systems have started to slow down a bit. Thankfully, the current system of phone subsidies from major carriers makes buying a new device every year or so a not-altogether-extravagant expense. And meanwhile, as we’ve continued to become conditioned to the idea that mobile phones are devices we must upgrade with a certain frequency, mobile phone manufacturers have continued to churn out phones that feel like they need to be upgraded at those same intervals. It’s a self-fulfilling prophecy.

“There’s no point in making a phone that lasts five years,” Jensen points out, “if you know your customer is going to throw it away after 12 months.” So that became a second tenet at Aesir–manufacturing beautiful phones that were meant to last.


That type of unique product, it was clear, would require a unique design process. And from the start, Jensen embraced the idea of creating phones that were the singular products by visionary designers.

Instead of making something that was dictated in form and function by a panel of designers and a battery of field testing, Jensen wanted to tap noteworthy designers to offer up their own ideas for unique, timeless handsets–things that would never get past the brainstorming phase at Samsung, Apple, or HTC–and he wanted to then manufacture them with no expense spared. The idea was that Aesir would introduce a new handset every two years or so, each completely independent of the one before it.

In a way that idea flips the existing model for hardware design on its head. Instead of brainstorming and testing and iterating until you’ve arrived at the design the market wants, Jensen hoped to give designers free reign to build their own phone, and then find a market for whatever they came up with. The core principles of building phones from the best materials that would last for years were always there, Jensen says, “but how it would look and how it would work was basically up to the designer.”


“Our role would be more like, say, a gallery,” he explains. “We would be responsible for making sure whatever came into the gallery was interesting and had something on its mind, but that’s it. How it looked, and so on, that was not our baby. For that, we would find visionary designers, and that brings in the exclusivity. Not because the product had to be exclusive, per se, but because if you give a designer a very free hand, then you skip some of the moderation or the compromise that you would typically get when you have a marketing department who have their say, the sales department who have their say, production people who have their say.”

This idea of a creating a mobile device without trade-offs is, at its heart, what Aesir is all about. “From the outset,” Jensen says, “we wanted to try to do something with as few compromises as at all possible. And then afterwards find a way to put it together.”


That whole bit about finding a way to put it together is where things got tricky. The design Yves Béhar eventually delivered to the company in 2009 wasn’t all that radical in terms of its appearance, but it called for specific, top-of-the-line materials and a thin design that would require precisely arranged internal components. A year earlier, Jensen had found funding from three Danish families, and with design in hand he set out to find people to build it.

There had been, in the early stages, a relationship with Flextronics, one of the world’s biggest mobile phone OEMs, but after spending six months scratching their heads over Béhar’s design, Jensen explains, they essentially threw in the towel. “If they were to bring Yves’s design to life,” he recalls, “it would be full of compromises. So the keyboard that went all the way to the edges–they couldn’t do that. It would be twice as thick as Yves’s design called for, and probably 15% or 20% longer. So you’d get something that was a far cry from what he designed.” In other words, hardly a phone without compromises. So Jensen cast about for new development partners, eventually settling on Product Development Technologies, an American company founded by a former mechanical engineer at Motorola.

Then came the real hard part: finding suppliers. Jensen and his colleagues at Aesir spent two years trying to locate someone who could supply the handset’s metal parts. They found one company that seemed like a promising prospect, but after a year going over Béhar’s design, they too came back and told Aesir that it wouldn’t be feasible to do the parts in stainless steel, as initially proposed, and that they’d only make them in solid gold. And a phone made out of gold, Jensen admits, would be “very hard to defend as not a luxury product.” (Eventually, a gilded version of the AE+Y was produced. Retail price: roughly $58,000.)


“So we were back to square one,” Jensen explains, “and we almost had to close the company. At that time we were already two years delayed. And our investors said, ‘We love the concept, we love the design, the thinking is great–but if you can’t find anyone to manufacture it, there’s no company.'”

The investors gave Jensen three months to find a supplier–which he did, in a French company that specialized in making precision parts for clients like Boeing and Rolex. But the road they had taken to get there had been extremely costly. “From start to finish, Jensen recalls, “four and a half years . . . instead of two. And instead of the ‘x’ million euros we thought it would cost, it cost four times that. But we got a product! Unfortunately at that time we ran out of money, and our owners ran out of money, just as we got on the market.” Béhar’s phone went into production, but in the ensuing financial vacuum, the company that supplied the electronics platform that powered the device took control of Aesir entirely.

And still, even after the suppliers had been secured, there were always nasty little lessons for the startup to learn, lurking in corners of the massive mobile industry. Jensen recalled one particularly demoralizing episode that transpired when the company was ordering the displays for Béhar’s design. Aesir was forced to buy 5,000 units at a time, which they could manage, but just as they were about to place the order, they were informed that they needed a small processor to control those displays–which required a minimum order of 100,000 units, at $2 a pop.

“Mobile phones are a mass-volume industry,” Jensen says, a bit wistfully. “And a lot of stuff that you need to make a phone like ours you simply can’t get in low volumes. Yeah, of course you can get all the stuff you manufacture yourself–keys and displays and all that. You can make those, because that’s typically an offspring from the watch industry. But everything that goes in and actually makes it a mobile phone, if you call someone and say, ‘I need a thousand of these pieces a year,’ they will just hang up. Normally, they would do a million! It’s not even a matter of saying, ‘I’ll pay 10 times the price.’ They don’t care. It takes the oomph out of trying to be a startup in this particular segment of the market.”


There aren’t many high-end mobile phone success stories out there. But there is one, a name that’s become synonymous with the luxury phone and one responsible for introducing some of its most unsavory connotations: Vertu.


Still, Jensen points out, Vertu couldn’t be more different from Aesir, in terms of the resources and relationships available to each. Through its connection with its former parent company, Nokia, Vertu has managed to sidestep the production woes that beset Aesir. And, perhaps more foundationally, Aesir sees its conception of luxury as one totally different than the one Vertu has put forward with its devices.

Jens Martin, the creative director of the acclaimed Scandinavian studio KiBiSi, has been with Aesir from the start and has helped guide Aesir’s creative vision along the way. He says their competitor is hampered by a “somewhat traditional perception of luxury,” based on “certain materials and certain price points.” Hence Vertu’s sapphire keypads.

So to set itself apart, Martin explains, Aesir has tried taking a different route to luxury status: intelligence–something “even more exclusive than material resources are at this point in time,” he explains. And if Béhar’s device tried to convey wisdom through simplicity and durability, KiBiSi, the studio responsible for what is slated to be the second handset in Aesir’s lineup, is going for pure innovation.

The current concept, seen above, calls for an Android-powered handset that looks like a handset, with the touch screen situated on the back of the unit, pointing away from the user’s face during a call. It’s a design that just makes sense on some fundamental levels. It’s a better fit for your face and hand; it reflects Aesir’s dedication to superior call quality; it precludes you hanging up or muting the call inadvertently with your cheek.

But it’s also just different from anything else out there, and that, perhaps, could prove to be the most important quality of all. Martin seems keen on finding customers that aren’t simply rich but thoughtful; people who have the “design vocabulary,” he says, to understand why it might prove dangerously narrow-minded to lock ourselves into the idea that a smartphone has to be a little black rectangle with a touch screen on the front. As for Jensen? He thinks KiBiSi’s head-turning design could have more mainstream appeal than the AE+1. “Yes, it’s a different design,” he says, “but it’s a really, really cool design. And it shows you can actually do something different with just a screen.”

To make a dent in the market, slashing the price for the handset, say, in half would certainly help. But that’s something that comes with getting a more realistic and sustainable manufacturing process in place.


For now, Aesir’s fate is in the hands of the new owners, and Jensen is currently trying to work with them to chart a new course ahead. He learned a lot of hard lessons trying to get Yves Béhar’s handset manufactured, most of all that the mobile phone industry is not kind to small, independent outfits. At this point, he’s open to anything, including some sort of official relationship with a larger manufacturer. But he remains optimistic about the potential for the KiBiSi handset. “There is no such thing as smooth sailing,” he says, “but I think it will definitely be much smoother than the first time around.”