BASEL, April 7, 2008 (AFP) - Besides the hefty five or even six-digit price tags, the prominent presence of mobile phone brand Vertu at the world's largest watch show in Basel seemed somewhat out of place.

But come next year, it may no longer be the only brand touting telephones at the fair.

Luxury watch brand Tag Heuer will begin selling mobile phones carrying its label from the second half of the year, and other luxury fashion brands such as Prada and Giorgio Armani -- which also sell watches -- have all already hopped on the mobile phone bandwagon.

Beyond mobile phones, watch brands are also quietly making inroads in the accessories business, further blurring the lines between traditional timepiece and fashion brands.

Omega, best known for its role as official timekeeper of several major sports event, has already begun selling jewellery and leather goods, and could even launch a perfume next year, its president Stephen Urquhart told AFP.

"We started out with jewellery, primarily because of our flagship stores around the world. We wanted to offer customers non-horlogical products that would fit the brand's image and profile," he said.

Urquhart stressed however, that watches remain the brand's main business, although jewellery would have a certain potential for the brand as its "precious metals, and the prices are more or less in keeping with our watches".

Another watch brand, Tag Heuer, is choosing to delve into the mobile phone business through a collaboration with ModeLabs Group, which custom-makes phones.

Tag Heuer's spokesman said products are not yet on show in Basel, but are expected to reach shops in the second half of the year.

For Vertu, the new entrants to the luxury mobile phone business underlines the huge potential of the market, the brand's Asia-Pacific Regional Director Giles Rees told AFP.

"We certainly welcome the competition, it endorses the category," said Rees.

Vertu is owned by the world's biggest mobile phone company Nokia, but its regular range of phones carries prices of between 2,900 (3,670 euros) and 58,000 pounds apiece.

One of its priciest phones, a limited edition complete with rubies, emeralds and diamonds developed jointly with Boucheron, was sold for over 300,000 dollars.

As Vertu enters its first decade since its conception, Rees said the company has seen strong growth, although he said company policy did not allow him to divulge specific figures.

"We are twice the company we were last year, that's not from a small base either," he said.

Besides having expanded its customer base, Rees points out that a massive number of return customers -- 40-50 percent -- means that not only are more people buying, but more are also returning to buy more.

Even with a recession looming in the world's largest market -- the United States -- tills look set to ring in strong figures for this year.

"I think everybody is a bit nervous about that (the looming recession)," he said, adding, however that his market is less likely to be as affected due to its high-end customers.

He said that the markets most affected would be those offering products at about 2,000 euros, or what these businesses refer to as the "more aspirational range."

These products are typically attractive to middle class professionals who would "spend their bonuses for presents on themselves."

"If those bonuses are not paid out, it gets diverted elsewhere -- to living basically," he said.

Does Vertu in turn foresee tying up with a luxury watch brand to make mobile phones?

"I'm not aware of plans at the moment, but never say never. We're a brand still in its infancy. We certainly need to continue to build up our own brand first," he said.

Over 1.1 billion mobile phones were sold around the world last year, according to a study released January.by Hui Min Neo