Last year, when I was going out with a friend of mine in Bangkok, we stumbled upon an area in Siam Paragon where they sell a lot of luxury watches. It was great to see a number of them at the same place, and we visited a couple few just to look around the collection. After a few stores, my friend asked me “Hey Chris, why do you like watches? What’s the difference between all those expensive watches?” and I realized that a lot of my peers who are born in the digital era doesn’t know the history of watches, why they can be appealing, and what the industry is like. That’s the reason why I made this piece, not to give an in depth watch analysis, but to give a quick background to the watch industry, especially the Swiss.
Let’s start in the beginning. The first watch that was ever created was the Pomander Watch. It is the oldest mechanical watch that’s recorded in history, created by Peter Henlein (1485–1542) in Nuremberg, Germany. Ever since then, mechanical watches grown, got more complex, and also often times is a sign of nobility and wealth. The mechanical watch industry then proceeded to dominate the watch industry for more than 100 years.
Unfortunately, all good things come to an end. In 1969, the first quartz watch is released by Seiko, the Seiko 35 SQ Astron. Quartz watches are the world’s most accurate wristwatch, and in comparison to mechanical watches, is much cheaper to produce. This started the quartz revolution, that destroyed the dominance of the mechanical wristwatch industry.
In 1983, the crisis in Swiss watch industry reached a critical point. The number of watchmakers decreased heavily from 1600 in 1970 to 600 in 1983. A research consortium, the Swiss ASUAG group was formed to save the industry, and the result is the Swatch. Surprising isn’t it? The Swatch that we all think is just a fun cheap watch, is the savior to Swiss watch industry. The Swatch grown and gave rise to what is now called the Swatch Group, the largest watch manufacturer in the world.
In spite of that, it took 14 long years before the Swiss watch industry made a comeback. In 1997, over half the value of all watches sold worldwide is generated by the Swiss watch industry, and although only 10% of the watches sold was mechanical, the mechanical watches account for nearly half of the total value generated in the Swiss watch industry.
It’s worth to note that in 2013, Swatch released a watch series they call Sistem 51. It’s a mechanical self-winding watch that only uses 51 parts, factory manufactured, 100% swiss made, and costed less than 200 USD. This provided a good entrypoint to Swiss made watches that is cheap and can be mass produced. At the time, this watch is thought to bring a new revolution in Swiss made mechanical watches.
And in 2014, smartwatches come to the spotlight as Apple released the Apple Watch. In hindsight, people are worried of the smart watch impact to the Swiss watch industry. The Swiss watch industry responded with their own take of smartwatches, such as TAG Heuer Connected, and Breitling Exospace B55. But alas, in 2016 we see that smartwatches dominance doesn’t come to be, and we even see players that are backing out from the smartwatch altogether, namely Motorola and Samsung.
Now, after a brief history, I’d like to share a little bit on the current landscape of the industry. You might know a lot of watch brands, to name a few, Rolex, Panerai, Omega, IWC Schaffhausen, Patek Philippe, TAG Heuer, Seiko. But what you might not know is that a lot of these brands are owned by the same group. In this piece, I will share a few of the biggest groups around :
1. Swatch Group (Switzerland)
Breguet, Blancpain, Glashütte Original, Harry Winston, Jaquet Droz, Omega, Léon Hatot, Longines, Rado, Union Glashütte, Tissot, Calvin Klein, Balmain, Certina, Mido, Hamilton, Swatch, Flik Flak
2. Richemont Group (Switzerland)
Vacheron Constantin, A. Lange & Söhne, Jaeger-LeCoultre, Roger Dubuis, Piaget, IWC Schaffhausen, Officine Panerai, Ralph Lauren, Baume & Mercier, Cartier, Van Cleef & Arpels, Montblanc, Dunhill
3. LVMH Group (France)
TAG Heuer, Bulgari, Hublot, Zenith, Dior, Fred, Chaumet, Louis Vuitton
4. Kering Group (France)
Ulysse Nardin, Girard-Perregaux, JeanRichard, Gucci, Boucheron, Qeelin, Bottega Veneta
5. Seiko Group (Japan)
Seiko, Grand Seiko, Credor, Pulsar, Lorus, Alba, Orient
6. Fossil Group (USA)
Fossil, Relic, Michele, Zodiac, Skagen, Adidas, Burberry, Diesel, DKNY, Michael Kors, Tory Burch, Marc Jacobs, Emporio Armani, Emporio Armani Swiss Made, Armani Exchange, Karl Lagerfeld
Outside those groups, then we have the independent watch brands, they’re not at all small, some of them are actually behemoths of the industry. In this category, we have for example, Rolex, Audemars Piguet, Patek Philippe, Manufacture Royale, Richard Mille, and Greubel Forsey.
Watches have a very broad range of prices, some of my friends told me “You know, if I have a Rolex, I must be very rich as it’s the most expensive watch.” Not quite my friend, not quite. Watches can go as high as millions of USD, and Rolex actually have a great range starting from around 5k USD. Compare that with Patek Philippe and Audemars Piguet, that starts at around 16k USD, and Greubel Forsey that starts at 150k USD. As you can see, the price range is extreme, and it’s a good idea for people that’s doing business to know the basics of price and class of the watch.
In 2016, the top selling watch brands are:
5. Tag Heuer
Then, let’s go a little bit on what kind of watches there are. In general, there are 4types of watches:
1. Quartz watches
Typically the cheapest kind, easy to mass produce, and is sometimes called the watch with “battery”. Left alone, quartz watch can work for a very long time without ever stopping. A well-made one can work for 20–25 years without a lot of maintenance, only battery replacements. It is also very accurate.
2. Mechanical watches — Manual wound
This is starting to be a bit rare, and is seen in high end watches such as Panerai. This watch needs to be wound manually by spinning the crown, and can reserve power until around 3 days. The most high end one can have a power reserve of upwards of 10 days. Needs maintenance every 2–4 years.
3. Mechanical watches — Self-winding
This one is what people typically means when they say “automatic” watch. This kind of watch is powered by kinetic movement (by moving, shaking, or generally just wearing the watch for the day). Although convenient, the power reserve typically doesn’t go over 100 hours, which means if you don’t wear it for 4 days, the watch will stop. Needs maintenance every 2–4 years.
Not a lot of explanation needed, these watches are like mini computers on your wrist and can usually be connected to your phone. Made popular by Pebble and Apple Watch, Swiss luxury brands such as TAG Heuer and Breitling are also going in the trend with TAG Heuer Connected and Breitling Exospace B55. Typical issue is the battery life, and how good the added functionality is.
Last, on why people buy luxury watches. It’s very unlikely that people now buy watches just to tell time, as we’re accustomed to smartphones and having clocks wherever we go. The typical reasons to buy watches is usually one of these:
2. To be taken seriously
3. To be unique
5. Subtle display of wealth / status
6. Loving the intrinsic complications
7. Adventure gadget — Think of diving watches, gshocks
8. Story of the watch — Think of the Omega Speedmaster that is also known as the moonwatch because it’s the watch that is worn by astronauts to the moon
To end this piece, I would like to say that watches have evolved through time from a device to tell the time, to a statement of oneself shown through the wrist.
P.S : If you want a recommendation on watches to buy, I’d recommend to first think of:
1. The budget you are willing to spend
2. Whether Swiss-made is important for you
3. The purpose of the watch (Business use, Casual, Adventure)
Then you can use the information to search for a good fit
P.P.S : My personal favorites:
< 1,000 USD : Orient Symphony, Orient Sun & Moon, Seiko 5, Swatch Sistem51, Casio G-Shock Rangeman
< 1,500 USD : Dietrich, SevenFriday P-series or V-series
< 3,000 USD : TAG Heuer Carrera Calibre 5 series, Omega Seamaster Aqua Terra Quartz
Luxury watches entry : Rolex Oyster Perpetual 39, model 114300 2016, Omega Speedmaster Professional series, Panerai PAM000