When you buy a watch, what do you look for? And what are you paying for? Also useful for when I look at listed watch companies later.
Price SegmentsSee this link for the different price segments.
Scarcity is the main thing determining which segment a brand is in. For example, the high end luxury brand "A Lange and Sohne" produces 5K pieces annually. A more popular luxury brand like Rolex is estimated to produce 750K to 1m pieces annually.
BrandsThe highest luxury brands are only recognized by people 'in-the-know', they mostly have unpronounceable European names - A Lange and Sohne, Vacheron Constantin, Jaeger LeCoultre.... Only the more popular(ist) luxury brands such as Rolex, Cartier, IWC are plastered all over the place. As my wife said, whats the point of spending thousands of dollars on a watch if no one knows what it is?
Different brands give different images: e.g.: sporty, elegant, technically sophisticated. You must decide how you want to present yourself to the world: Do you want to be James Bond, Tiger Woods, or some 5th generation European aristocrat speaking in ze funny accent?
Some brands maintain a basic style which is instantly recognizable among all models of that brand (e.g.: the numbers on a Frank Muller or Cartier watch). Other brands are have no distinguishing characteristics in their lines (e.g.: Omega).
How is a good brand made? After deciding on the price segment and image, its a long, slow process...5 to 10 years...of stoking demand, creating excitement, always producing slightly less than desired, and raising prices. The company needs to make sure the goods are never 'on-sale', either by owning their retail outlets, or buying back unsellable goods from retailers to keep them off the grey market.
OriginMost luxury watches are Swiss made, meaning the at least 50% their components (by value) are from there. This may increase to 60 or 80% later.
A few luxury watches are German. There may be some Japanese luxury watches, not sure if they can sell outside of Japan. I think its possible for the industry to move production to other European countries...maybe even Japan...but they can't produce elsewhere and still maintain their class.
TechnicalHand wound, automatic, or quartz: this short video explains. Quartz is a no-no for men, but OK for women.
In-House or ETA: 80% of the watch industry 'movements' are manufactured by ETA (owned by Swatch group). Many watches, even for well known brands, simply design a case, put the movement i, and sell it as their own. Watch enthusiasts prefer 'in-house' movements, where the company creates all parts of the watch by themselves. You may pay $5000 for a watch which just has a movement slapped inside a case, when the same thing is available under another brand for $500. Again it has to do with being exclusive. A Honda is just as good as a BMW...but, if you pay a BMW price for a Honda, you are being ripped off - and you have more money than taste...So if you have watch collectors for friends, take note. (Again, it doesn't seem to matter for women.)
More ComplicationsEvery second watch advert I see has a 'tourbillon'. Here is an interesting 2007 interview by Frank Muller, I like his examples of how changes to the watchmaking industry affect the value of the end product:
"You are buying more of the dream, the image and the magic and less of the technicity. Indeed the technicity serves to primarily to support the reputation of the brand." (...my wife was right).
"A tourbillon is a dream. It is magic. Because it is a dream it must be a bit inaccessible....But you make the tourbillon suddenly very accessible, do some degree you destroy the dream and you break the magic."
"A real hand made rattrapante costs minimum 50 thousand Swiss Francs and suddenly you’ve got a guy who has one on his wrist that costs less than 10 thousand Francs. How will that make you feel...? Once the dream has been broken you cannot repair it and this should be the greatest cautionary tale to what is going on with the tourbillon."
In the end, it doesn't matter what a 'tourbillon' or 'rattrapante' is... or even how to pronounce all these big words - the only important thing is that prices are falling. All these fancy complications in a watch can become obsolete. The brand is more important, it has a better chance of lasting.
A Nice WatchLong time ago I went to a used watch shop with my wife. There was row upon row of watches, each one priced from 4K onwards. Couldn't believe how fugly most were: garish colors, 4 or 5 separate dials cluttering the watch face, studded with diamonds...like something a drunk rapper would wear.
After spending all this time online looking at watches, I've only came across one that strikes me as beautiful. It looks like a watch, is easy to read, fits nicely with casual or formal wear, and comes without the marketing baggage: you don't have be James Bond or Tiger Woods to wear it:
Probably won't get it though, 5K is too much for a watch. [edit: was only SGD 3K. A reasonable amount, but no so much that I should have spent on stocks instead...].