11. A New Stunning Luxury Dior phone Targets China, Russia

French luxury-goods company Christian Dior SA Wednesday will unveil a line of mobile phones, extending beyond its traditional fashion business to boost sales, particularly with brand-hungry consumers in new markets such as China and Russia.

The new Dior phone -- priced from €3,500, or $5,000, and up -- comes after competitors such as Prada SpA and Dolce & Gabbana have turned their fashion-branded mobile phones into significant businesses.

"In the same way that we have developed our watch and jewelry lines, we want to increase sales with the phone," Dior Chief Executive Sidney Toledano said in an interview.

The phones will be made by a small French manufacturer, ModeLabs Group SA. Mr. Toledano says he expects to sell at least 10,000 of them a year at the beginning and hopes to reach annual sales of €200 million in the longer term. ModeLabs invested several million euros in research-and-development costs on the new phone, said the company's founder, Stéphane Bohbot.

That revenue target is lofty, considering Dior's overall sales last year were €787 million, but is in line with rivals. Last year, Dolce & Gabbana and its partner Motorola Inc. sold €200 million worth of the designer label's gold Razr phone.

Dior's move comes as high-end fashion houses are crossing the boundaries of traditional fashion items to boost sales. After the licensing heyday of the 1980s, which cheapened the names of many fashion houses by putting them on items ranging from lighters to toilet-seat covers, labels reeled in their branding efforts during the 1990s.

Yet in recent years, many companies have branched out again, this time with a pledge to be more selective about how they use their name.

With mobile phones, fashion brands have insisted on taking part in both design and marketing. Last year, when Italian fashion house Prada launched a phone with South Korea's LG Electronics Inc., Prada tinkered with the touch screen and preloaded content in addition to working on the phone's basic design.

Mr. Toledano said the idea of creating a Dior phone was driven by demand in new luxury markets such as China and Russia.

"What really convinced us was seeing the attention people in emerging markets pay to buying a phone, by selecting the color and design," said Mr. Toledano. In Europe and the U.S., in contrast, phones are seen as more disposable commodities, he said.

Dior's new phone -- which will work world-wide, except in Japan and Korea, where it isn't compatible with local wireless networks -- is priced higher than rival fashion phones, closer to the price range of Nokia Corp.'s premium line Vertu, which also starts in the $5,000 range. Dolce & Gabbana, Prada and Giorgio Armani SpA all have phones out that cost around $600.

In addition to all the regular features of a cellphone -- a touchscreen, a camera, ringtones -- the Dior phone offers a new gimmick: a miniature phone barely bigger than a USB key. Dior says the mini "My Dior," as it is called, is handy for women who don't want to rummage through their bags to find their phones. Instead, the mini version of the phone clips to the outside of a bag for easier access. It communicates with the main phone, so people can pick up or make calls with My Dior and use the main phone for more complicated functions.

When LG Prada came out in Korean mobilephone market, they sat in a pioneering position. But nowadays all different luxury brands do not just remain as they are but make an effort to expand their business through collaboration with other companies. Even though Dior phone is not going to produce phones in korean market, I assume that there will be fairly considerable amount of demands for Dior phone. This is because its design is so appreciated amongst trend sensitive women segment. I wonder if Christian Dior phone is out in Korea, the boom will be expected to be visible in Korean market, too.

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