Nokia plans luxury phones

January 11, 2002 Posted: 0957 GMT

LONDON (CNN) -- Nokia is creating a subsidiary to sell mobile phones encased in precious metals or other luxury materials.

The Finnish mobile giant plans to offer the devices under a new brand name, Vertu, produced by the London-based subsidiary.

The unit, which will be called Vertu Ltd. and have separate management from Nokia, will be launched globally on January 21.

Vertu has hired some 200 people, and the company has contracted jewelry makers and craftsmen to manufacture the new devices, which will use existing technologies.

The move comes amid a slump in mobile phone sales, with the slowdown partly reflecting saturation of major markets. Consumers have also delayed  purchases of new phones as they wait for new technologies that will allow downloading of video and audio clips.

Nokia, the world's largest maker of mobile phones with a market share of nearly 40 percent, has been forced recently to concede that its global market forecasts for last year were overly optimistic.

In response to the sector downturn, Nokia has cut 4,700 jobs from its 60,000-strong workforce.