Why Are Watches So Expensive?
The world is divided between watch enthusiasts and those who only use their watches to look at the time, especially recently, who have forgotten about timepieces and gone straight to their smartphones. But whichever category you belong to, you may have realized that watches generally cost money. And some, they cost a lot more than they really should! But this doesn't just apply to watches, but to so many other items where a successful brand is involved.
Whatever the case, let's start by finding out the motives why watches sometimes cost a lot. And you'll see that the reasons are many, and in some cases, they are less prominent than you expect.
Are you ready?
Why are luxury watches so expensive?
Let's start by saying that not all watches are expensive: many excellent timepieces are incredibly affordable, despite being practically indestructible and highly accurate. But what makes the difference is that little word, "luxury."
Luxury is what transforms an instrumental something, born to perform a purpose in the best way, into an object that goes beyond the function and becomes an expression of a way of being: that of the wearer. This means that what your watch says about your personality is important. We dare to add: fundamental.
We are sure you will have noticed the difference between someone who, for example, wears a Rolex Submariner and a Patek Philippe Calatrava: these are two persons who are probably quite different from each other, both in attitude and style. Yet, going to check the street price for these two timepieces on the "second wrist" market, we will find them very similar. Which might seem unbelievable to us, and yet it is. And the price, in a society like ours, is made by the market, not by the manufacturers' price lists (which, as we shall see, in many cases, do not reflect the street price at all).
As a practical note: the current trend is that watches are becoming more upscale, and more expensive. Data published by the Swiss Manufacturers Association tell us that watch sales worldwide were down in 2020, but the overall market went up. This means that people is buying less watches, but they are of a higher price.
What makes a watch expensive?
There are four main reasons why a luxury watch is expensive. But, as you will discover, some of these have a very tenuous connection with the material characteristics of the timepiece in question.
1 - Brand
Watchmaking is an ancient industry whose roots go back over 500 years, and the oldest company still in business, Blancpain, was founded in Villeret in 1735. One can easily understand why the brand, and its historicity, are of such great importance in the world of watchmaking. Vintage watches coming from these brands simply shine with the grace their exquisite craftsmanship and long legacy gives them, to touch the soul of the true watch lover, and companies profit from this fascination.
So much so that several companies, from the end of the twentieth century, began to re-register brands that had disappeared long ago, but which had a significant past and tradition on the world watchmaking scene, and "stuck" these brands on top of new watches that had nothing to do with them - with results that were sometimes good, but other times questionable.
So, if you buy a watch from an important and recognized brand, you will be prepared to pay more - and in some cases, much more - than what you would pay for an almost identical watch but without that brand (that is, what is known as homage watches).
2 - Popularity/Fashion
Let's face it: just like in fashion, the popularity of particular brands and models determines the success of this or that watch over another. And like anything that is connected to people's moods and has little adherence to its intrinsic qualities, this value can skyrocket or go underground just because people's sentiment has changed, and what was extremely "cool" yesterday is no longer so today.
A similar thing happened during the Quartz Crisis. The first quartz watches were not only highly technological and innovative: they were also incredibly expensive. And so, especially in the early days, many famous watch companies set out to build high-end quartz watches because quartz was fashionable and because it allowed them to make incredibly thin watches.
For example, one of the most extreme was a certain Concord Delirium, only 1.93 mm thick. It was unveiled in 1979 at Tiffany Jewelers in New York, and the ten examples presented for $7,500 each (equivalent to about $29,000 today) were all sold on launch day. For comparison, a no-date Rolex Submariner used to cost $980 back then. Try looking up the current values of both watches.
3 - Technique
Here we get into the specifics of why a genuine luxury watch is worth its price. Let's say right off the bat that generally, the most valuable part of a timepiece is not the precious metal case or any precious stone coverings - which though abound in specific particular models: it's the watch movement, the beating heart of the watch. And depending on its sophistication, it can be worth quite a bit or a lot.
Some functions of a watch make it particularly valuable, and we're talking about the so-called complications. The name is pretty self-explanatory: a complication makes the watch more complicated, as it provides additional features beyond the standard one of showing the time. So, even the automatic winding, or the date display, are considered complications, although by now, their impact is minimal on the price of a timepiece. Instead, other types of complications have a higher "weight": for example, the chronograph movement or the annual date display. And then there are some significant complications, such as the tourbillon, the perpetual calendar, or the grande or petite sonnerie.
Everything becomes even more exclusive if we talk about the so-called "grand complications," that is, the union of several simple complications: a timepiece that combines a chronograph with a perpetual calendar usually is much more complex - and expensive - than two watches mounting a single one! And that happens because if you want to introduce complications into a watch, you need to add new mechanisms: tiny pieces with micrometric tolerances that cost a lot of money. Just think that a typical tourbillon (not the whole movement: just the tourbillon) employs about a hundred different elements. There are complete watches, such as Swatch's System 51, where the entire timepiece is composed of 51 parts only.
4 - Finishings
Finishings are the other element that significantly affects the quality of a watch and its movement. They are usually employed in luxury dress watches. And while the final effect looks stunning, they serve virtually no purpose. For example, there are surface finishes practiced on bridges and surfaces, such as what's known as perlage (small, overlapping circles created by a rotating brush bit) or Cotes de Geneve (long, shaded stripes that make up a striated pattern) - and while the process to design them uses machines, the workmanship is typically done by hand.
Another finishing, called anglage, involves creating 45° oblique surfaces in bridges and plates where there are sharp edges, with the horizontal surfaces covered in perlage or Cotes de Geneve. In contrast, the slanted surfaces are polished to a mirror finish - and this craft must be done by hand, as there are no machines precise enough to pull it off. Finally, the last processing - the most exquisite one - is called black polish. Metal surfaces are polished with diamond abrasive papers from the coarsest to the finest grit until they are black and shiny. This is a job that can only be done by hand by a few artisans and takes something like one hour to polish a screw head. Think about how long it takes to make a typical bridge.
And we have not addressed other processes such as engravings on movements, rotors, and cases, or the infinite number of techniques that can be done on dials, often made of enamel or porcelain, very delicate materials that must be fired in special ovens. In the case of the famous Chronometre Bleu by FP Journe, the artisan applies several layers of enamel, one on top of the other, with the result that about 80% of the dials fail to overcome the stress, crack and are thrown away. These are creations of the highest craftsmanship that often border on the truly artistic. This is what true luxury means in a superior quality watch.
Are expensive luxury watches worth it?
When a watch enthusiast buys a multi-thousand dollar luxury watch, he knows that a simple quartz watch he finds in a mall for a few dollars will probably be much more accurate than his. But that's not the reason most people buy a luxury watch.
Like a car of a particular type, or a custom-made suit purchased from the tailor, a luxury watch touches other, deeper, more intimate chords that make it go far beyond its function. This means that the typical luxury watch will not offer value for what it does but for how it makes the wearer feel. And it would be superficial to think that it's bought purely for show, to impress others. Put in front of an Average Joe a Rolex Submariner and the FP Journe Chronometre Bleu we mentioned earlier, and ask him to choose one of the two. Eight out of ten would take the Submariner, worth about $10,000, instead of the Chronometre Bleu, which starts as a second-wrist around $75,000. So, if you want to buy a luxury watch to impress people, you might want to reconsider.
The ones you will impress, however, will be the watch collectors - the connoisseurs who love watches. Who will do so not only because of the depth of your wallet but more importantly, because of your taste and knowledge of the intrinsic qualities of watchmaking and of that timepiece in particular.
Why do people buy expensive watches?
People buy expensive watches for several reasons. One of the most common - especially for those who have never had an expensive watch - is the desire to prove to others that they are somebody, and usually, this is the wrong reason. This kind of person typically goes for the best-known brands without having even a superficial knowledge of the subject. The result is that they often buy watches that seem very enticing but, in reality, have little content. And this is also one of the reasons why "fashion watches" - watches made to please the eye, with an attractive price, a famous fashion brand on the dial, but only passable quality and very little content - are so successful.
A second reason is that of investment. The Internet is full of gurus explaining how to invest in watches, assuring great returns in the future. In reality, the actual expertise of certain characters is grinding out views for their social profiles. We who know watches well can tell you that, with very few exceptions, watches are like cars: the one who earns money is the one who sells them. Too many factors affect the value of a watch over time, so anyone who buys a timepiece to invest is putting their money into a bet on a single number on a roulette wheel. The best way to get an idea about the future evaluation of a watch is to study and inform yourself (our articles are a good starting point).
The last reason is the rightest one: we buy an expensive watch simply because we like it. Maybe we want its aesthetics and movement. Perhaps we like how it complements our look. Or even, we appreciate the history of the Maison and its proposals. Or maybe, to reward ourselves for something we have done, we choose a watch instead of a vacation, a car, or some other object. Those who do so are aware that they are not doing so to buy a more precise timepiece; or that just as with an expensive watch, their charisma will be irresistible. Most probably, he knows that as soon as he leaves the store, the value of that watch will have immediately halved. But it doesn't matter: maybe it's a timepiece we've seen in a shop window and dreamed about for a long time - and finally being able to buy it is all that matters.
What makes a watch a luxury watch?
This is a question you often hear, especially from those who are not familiar with the world of watches. The answer is standard for all luxury items, whether a watch, a dress or a car. Luxury is that intangible but very perceptible quality that differentiates a simple utilitarian object from a - precisely - luxury item.
This means that both objects considered will have a similar function - in the case of a watch, that of marking time precisely - but they will be divided by the accessory qualities related to the type of object considered. So, to name a few, the finishing, the brand, the complications, the materials. In short, everything that contributes to making our timepiece more "special" than what would be a watch that only serves to tell the time. In a sense, luxury is the art of enjoying the pleasures of life. So those who buy a luxury watch consciously choose to purchase something that satisfies a hedonistic need, which has little to do with the object's intrinsic functionality.
Since luxury concerns a very personal sphere, there cannot be an objective definition of luxury: according to the person, an object can be luxury or not. And this confirms the old saying, "A man's trash is another man's luxury."
Without getting lost in complicated definitions of luxury, we can say that luxury is a relative and multidimensional concept: for example, with respect to the geographical place where we live, to economic possibilities, to a specific period. For example, when it was launched, the same quartz watch was a luxury item - the first Seiko Astron cost as much as a car. Today, you can purchase a similar movement for just a few dollars.
And let's remember that there are different levels of luxury: a mechanical watch industrially produced in one million pieces per year, as is the case with Rolex, has a very different level of luxury than a watch that comes from a manufacturer like Patek Philippe, who creates 60,000 of them per year. And compare this to the craft of an artisan manufacturer such as Roger Smith, who instead makes only 12 per year.
How much do watches cost?
In some cases, less than you think, for the same performance and technology features.
You can find quality automatic watches starting at $100 produced by companies with an excellent tradition, such as Seiko and Orient. If you want to buy watches Made in Switzerland, Swatch makes quartz and automatic watches at similar and even lower costs.
If you want to buy sports watches, Casio produces the G-Shock line that offers virtually indestructible timepieces.
If you want to invest a little more, and you like the idea of buying a quality watch with a mechanical movement (manual or automatic), many Maisons produce beautiful and reliable watches from $300 and up. In contrast, those that mount a quartz movement typically cost a little less. To understand where a watch comes from, look at the dial: if it says "Swiss Made," it means that the timepiece was made in Switzerland and mounts a Swiss movement. This doesn't ensure that the watch is excellent, but for sure, it will at least be of good quality.
Remember the features we explained above? The more a watch is of a well-known brand, fashionable, complicated, or decorated/refined, the more expensive it will be. To give a practical example, a Rolex Submariner costs about twice as much as a diver's watch with the same characteristics produced by the other Rolex brand, Tudor.
So, if you want to understand which timepiece to pick, we have published a handy watches buying guide that you might profit of.
As we have seen, there are many reasons why one watch can cost ten or a hundred times more than another, and very often, they are so exotic that we wonder if they are enough to justify these prices.
But in the end, only the public can answer: we know that the law of the market is the one that decides. And if someone produces costly watches and stays on the market, it means that there is someone who buys them. So, the answer to this question is only inherent in us, our taste, and our passion for watches.