Silent Circle And Vertu Partner On $10,000 Phone

By Jon Matonis
Forbes
Thursday, February 21,2013

http://www.forbes.com/sites/jonmatonis/2013/02/21/silent-circle-and-vertu-partner-on-10000-phone/

Can a $10,000 smartphone buy happiness?

Probably not. But it can buy privacy and state-of-the-art encrypted communications. Luxury UK phone maker Vertu has partnered with secure communication provider Silent Circle for end-to-end voice and text encryption worthy of its designer product. The Rolls-Royce of phones meets the gold standard of mobile encryption.

Priced at $10,500 (7,900€) and sold through boutiques in 60 countries, this is the phone you never want to leave in a taxi cab accidentally. For those of us annoyed with friends and colleagues repeatedly showing off their new iPhone 5 or BlackBerry 10, Vertu offers the hand-crafted Ti model with 3.7-inch sapphire crystal screen and titanium case. More comparable to classy wristwatches and fine designer handbags, there's also Signature and Constellation models at even higher prices.

Now, each Android-based Vertu Ti will come already provisioned with Silent Circle out of the box. As the preferred private communications service partner to Vertu, each new Vertu Ti phone comes with a complimentary 12-month subscription to Silent Circle. Also in a clever viral move to spread adoption, each new subscriber will get five 30-day companion licenses which will operate on any platform and allow the customer to build their own circle of secure communications.

The famous and tailored Vertu Concierge service that sits at the heart of every Vertu phone experience was also specifically customized to support Silent Circle for a seamless blend of performance and customer service. These proprietary concierge apps offer round-the-clock live support and dedicated specialists available through text, voice and email.

More attentive to your needs than Siri and quickly accessed via the custom ruby key on the phone, Vertu Concierge caters to the demanding needs of the Vertu customer with a team of "lifestyle managers" covering all major time zones such as London, Paris, Milan, New York, Shanghai, Dubai, Moscow Hong Kong, and San Francisco.

Already in the circle are high-profile government departments, intelligence agencies, exiled leaders, and former heads of state. Thanks to the Vertu partnership, Silent Circle can now add Russian oligarchs, Persian Gulf oil sheiks, and Hollywood celebrities to that list.

Founded in 1998, Vertu has approximately 1,000 employees and 470 international points of sale. Last year, the company's sales approached 300 million euros, up from 266 million euros in 2011, and they have sold 300,000 devices over the last 10 years.

Silent Circle CEO Mike Janke, who will be speaking at next week's RSA Conference in San Francisco, explains how this unique partnership happened: "Over the past three years, Vertu's #1 request from high-net-worth customers has been secure communications. And after they spent 18 months visiting various companies and testing secure chat, phone and text products, they chose Silent Circle."

Analyzing the specific terms of the deal -- a bulk purchase of 35,000 one-year subscriptions without exclusivity conditions -- reveals why it is so critical for startups like Silent Circle to shy away from exclusive and usually lucrative partnership offers. Non-exclusivity may leave some money on the table in the short term, but the 32-person Silent Circle team doesn't seem to mind.

At this early point in the secure communications game, a single exclusive deal would nearly equate to an acquisition. And with most of the industry's leading players knocking on their door, Janke says "it is very tempting to sign an exclusive arrangement with a top phone manufacturer or a leading mobile network." However, Silent Circle remains solidly focused on the larger global market and that means non-exclusive coverage on every platform, everywhere.

Meanwhile, back at the bat cave, Silent Circle's latest Silent Text offering for Apple's iOS finally received approval yesterday after an arduous 21-day App Store process.

[Note: Silent Circle makes their source code available for review on github.]