BoingBoing and Daring Fireball both have been making fun of Vertu recently. Vertu's a company which sells horrible crappy phones at incredible prices, often by encrusting them with diamonds. I first became aware of Vertu a while before this, through The Robb Report, a magazine for the ultra-rich.
I read it not because I'm in the market for a new yacht, but because a great writer on entrepreneurialism recommends subscribing to it so you can get used to the sheer incredible amount of money that you can charge very wealthy people for very simple things. In related news, I was just in Santa Fe, New Mexico, for the holidays, where you can easily find a set of kitchen knives with inlaid turquoise for over $2,000 -- despite the fact that they cost the store $250 at the absolute most.
Vertu's products are utter crap, and only a stupid person, a person with terrible taste and no concern for money at all, or a person in a ridiculous hurry would ever buy them -- but I can't criticize their business model. Their business model is simple: charge the highest price possible. I wouldn't buy any of their products if I was richer than Warren Buffet, but I can still see that their business operates on a very sound fundamental principle.
At Daring Fireball, John Gruber invokes a Warhol quote as the best explanation of why Vertu's ridiculous:
What’s great about this country is that America started the tradition where the richest consumers buy essentially the same things as the poorest. You can be watching TV and see Coca-Cola, and you know that the President drinks Coke, Liz Taylor drinks Coke, and just think, you can drink Coke, too. A Coke is a Coke and no amount of money can get you a better Coke than the one the bum on the corner is drinking. All the Cokes are the same and all the Cokes are good. Liz Taylor knows it, the President knows it, the bum knows it, and you know it.
He's absolutely right, but that's no reason not to charge people as much money as they're willing to pay. If you go to the store to buy something, and the money you're paying with is money you got in a silly manner, they don't tell you to come back when you have some less ridiculous money. They just give you what you're buying and tell you to have a nice day. And if some idiot wants to pay you $100 for a $1 Coke, even though they know about the $1 Coke, go ahead and let them. It's their choice.