The answer, in a nutshell, is exclusivity, materials and service, says luxury phone maker Vertu.
Its new Signature Touch phone was launched earlier this month and costs between $10,000 and $22,000.
Features of the Android-operated smartphone include a 4.7-inch full HD display screen, protected by sapphire crystal, a 13 mega-pixel camera with a twin LED flash and Dolby digital virtual surround sound.
"What's so special about it is the marriage of exclusivity, materials and service," Hutch Hutchison, Vertu's head of concept creation, told CNBC ahead of the Signature Touch launch in Singapore on Thursday.
"Previously, dating back to 2008, the original Signature Touch was iconic, just a status phone, a cult object. The latest phone adds the latest technology to that same sort of very formal, very distinctive design DNA," he said.
The company, which was owned by Nokia before it was sold to a private equity firm in 2012, focuses on the very high end of the smartphone market.
Each phone is assembled by hand in England and has a concierge button that allows the user to contact a global team for localized advice and help.
Hutchinson said Vertu has sold about 300,000 handsets since 2002, declining to give details on profit margins.
Others however, have been making moves into the space – e-commerce giant Amazon for instance last week unveiled its first-ever smartphone, the Fire Phone.
Asked whether Signature Touch was more about status then usability, Hutchinson said Vertu's phones were "genuinely better" than rivals.
"This has every bit the usability and quality [of an Apple or Samsung phone], if not more," he said. "The screen is built from solid sapphire, only diamonds are harder. So you'll never scratch it and it's more resistant to breakage on a drop."