Prices start at £2,900 – and you don't even get a camera. So why is the Vertu walking off the shelves? Tim Walker meets the man who makes the world's most ostentatious mobiles

Frank Nuovo cradles in his palm what is, if not the world's most costly mobile phone, then perhaps its most elegantly conceived. It's the Vertu Boucheron 150, designed by Nuovo himself, a dapper, serious Californian whose passion for his product is entirely unapologetic. Formerly head of design at Nokia, he is the founder and chief designer of Vertu, the world's leading maker of luxury mobile phones.

It's 10 years since Nuovo, who is 47, set up Vertu, and six since the first Vertu phone, the Signature, went on sale in Helsinki for an eye-watering €24,000. Despite the global financial maelstrom, the company, a subsidiary of Nokia, is thriving. A 10th-anniversary edition of the Signature range has just been launched, and though Vertu phones are produced by 400 staff at an atelier in Hampshire (each handset has a plate engraved with the signature of its creator), expansion continues apace; there will be 50 stand-alone Vertu stores worldwide by the end of next year, from Las Vegas to Tokyo. The latest opened in London's Old Bond Street last week.

"It was passion that started Vertu," says Nuovo. "I looked out into the world and saw that every other functional object had made the adventure from pure function to fine craft. We resisted using the word 'luxury' for our first two years. We saw our phones as high-craft, precision 'instruments of communication'. But we had to start calling them luxury mobile phones so that people would understand what we were talking about!"

It's in the basement of the Old Bond Street store that Nuovo now stands, dabbing at his latest creation with a polishing cloth, concerned that he may have left a fingerprint on its shimmering gold carapace. Designed to commemorate the 150th anniversary of Boucheron, the renowned Parisian jewellery house, the one-off Boucheron 150 has been crafted (over 2,200 man hours – 1,000 for cutting to shape, 700 for polishing, 500 for assembling) to resemble a jewel, though it is, in fact, a single slab of sculpted gold.

"Michelangelo had teams of people helping him to carve," Nuovo explains. "They were under contract to produce a work of art sponsored by someone. There were no watches or cars, so the luxury of the day was art. Luxury is about those with means supporting the craftsmen and artisans of the world. People think these objects just appear in the store. They don't consider all that must happen before that – for any object, let alone one so finely crafted."

The Boucheron 150 comes in a varnished-walnut music box made by the Swiss company Reuge. (The charger is in there, too, couched in splendid leather, just in case anyone actually buys the thing and wants to put it to use.) It has a crystal-clear ringtone composed by Dario Marianelli, who won an Oscar for the Atonement soundtrack. If you're looking for a Christmas gift for the man who has everything – and you happen to have rather a lot yourself – then look no further.

Nuovo prefers to avoid too much tawdry talk of price tags, but if the unique 150 isn't his most expensive creation to date, then that would be the Vertu Signature Cobra, which comes coiled in a bejewelled snake (two diamonds, two emeralds, 439 rubies), courtesy of Boucheron. It's attractive, if you like that sort of thing, and worth somewhere in the region of £170,000.

If your pockets aren't quite deep enough to purchase the Cobra, then the Vertu Ascent, which chief engineer Hutch Hutchison describes as the company's "entry level" model, retails at a modest £2,900. It may not have much of the bling expected by the average mobile-phone user (no camera, no Bluetooth wireless), but it boasts rather more timeless touches of quality: made from ceramic, stainless steel and a durable alloy called Liquidmetal, the Ascent is finished with hand-sewn leather and a scratch-proof sapphire crystal screen. Vertu now has competition in the luxury phone market that it created, but the company's USP remains its personal "concierge" service, accessed by the "concierge button" on the side of each Vertu phone, which puts its owner through to a team of helpers.

"We're about creating the very best of something, not the latest thing," says Nuovo. "We're not talking about a multimedia functionality device here. We already have what might be called the 'traditional' mobile phone, which does voice, text, email and surfs the web. But the 'smartphone' is still a developing category. When it's a mature technology, we'll make those moves."

There's an undoubted beauty to Nuovo's designs. The original Signature phone was inspired by "the fine watches of the world"; the gleaming chrome curves of the Ascent were inspired by "the finest luxury European sports cars"; the Constellation, Vertu's third model, was inspired by "the shapes and forms of vintage aircraft". There's a set of Ferrari special-edition Vertus, too, which have silver Ferrari stallions gracing every surface, and Eighties-rock ringtones composed by Dave Stewart.

Still, it's all very well comparing a phone to a Michelangelo, but in Florence you can feast your eyes on his David virtually free of charge. Nuovo's "sculptures", on the other hand, are confined to the pockets of the rich. "People have celebrated watches and jewellery for a long time, and no one is ashamed of that," Nuovo argues. "Traditionally, when you graduate, you might be given a fine watch." Why not, his thinking concludes, a Vertu?

"The exclusivity of the product is organic – it costs a certain amount to make this product and get it out into the world. Imagine this was a world without beautiful things, where we said mediocrity was just fine and we never tried to make aspirational products. It would be pretty darned dull. You don't not make a fine car because it's too good. That's creative oppression.

"Our customers are fortunate enough to have the means to support craftsmen. Thank God there are those people, because they're supporting the hundreds who make the object – be it a leather bag, a Ferrari or a Vertu."

Nuovo doesn't hide his own love of high-end bling; although he's dressed head-to-toe in black, he toys with the Boucheron "Quatre" ring on his finger ("made from four colours of gold"), and casually mentions his Porsche. Yet he is also well aware of the mass market, and far from shy about his huge influence on it. For it was Nuovo who championed the layout of the standard Nokia keypad in his design-chief role between 1995 and 2005, and Nokia still owns Vertu. "Our mission at Nokia was to make extraordinarily high-performance products at the most inexpensive cost possible," he says. "When I left in 2005, there were over a billion phones out there with my imprint on them. Now it's probably well over two billion across the globe. So I don't make any apologies for mass-market thinking."

The relationship between the two companies is mutually beneficial. The technology in a Vertu comes from Nokia. And, Nuovo explains, "Vertu is like a Formula One team for Nokia. We have enriched Nokia's knowledge of making mass-market products, helping them to learn things about design, manufacture, retail and service."

Though he resists describing his customers as "recession-proof", Nuovo admits that the Vertu demographic may be less affected by the credit crunch than others. And when you're wealthy enough to buy one Vertu phone, you're probably wealthy enough to buy two: "We have many loyal return buyers. Some people come into the store and are upset when we don't have anything new."

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