Inexpensive vs. Luxury Watches

Jan 08, 2022
Watch Making

King Jewelers has hundreds of watches produced by some of the finest manufacturers. Prices range from about $500 for select Hamilton and Seiko watches to more than 6 figures for prestige rarities from Girard Perregaux, Hublot, Jaquet-Droz and Breguet. Regardless of price, mechanical watches all tell time with roughly the same degree of accuracy, and they frequently have complications that extend functionality beyond the simple 3-hand threshold. So, what differentiates a watch priced under $1,000 from one that costs ten or a hundred times as much? It’s a combination of factors, some of which are easily quantifiable and others more subjective.

Materials

Let’s start with materials. Stainless steel is commonly used on watches of all types. There are several different grades of stainless steel that differ based on the non-steel elements that are used in the alloys. The most common grades used in the manufacture of watches are 316 and 316L, which has less carbon than 316. Both are corrosion resistant and impervious to temperature extremes. Rolex uses 904L steel, which is harder and brighter than 316L, and more expensive to produce (the materials cost of a steel pre-owned Rolex is not the primary driver of the watch’s value, however…more on that a little later). Precious metals and gemstone have intrinsic value and certainty contribute to the price of a luxury watch. As a result, the cost to produce an 18k gold watch with diamond embellishments is significantly more than an unadorned stainless steel watch. The same goes for cases and bracelets crafted from ceramic, titanium, bronze and Palladium.

Finish and Details

It is often said that an expensive watch feels better on the wrist. One reason is the way the materials are finished. A watch has countless surfaces and textures, all of which require some degree of treatment. Wearing a Breguet feels different than wearing a Hamilton. The edges are smoother. The case is more contoured and refined. The strap is more supple, the bracelet silkier and the deployant clasp more secure. The details are also more elegant and intentional. It is apparent on dials that have applied markers or have been hand enameled to create rich colors, textures and depth. You can feel – and hear – the difference on the click of a rotating bezel or when pressing the pusher to start the chronograph. The good news is that these experiences are not limited to the upper range of watches. You’ll feel a significant difference when you cross the $1,000 threshold and another major difference above $5,000. The best way to understand is to experience it for yourself by trying on a few watches to feel the weight, balance and texture on your wrist.

Watch Movement
Movement

Consider what’s actually inside a watch. If it’s a hand-wound or automatic, the movement likely has at least one hundred individual components. For watches with multiple complications, there could easily be 300 or more parts. The movement in the Patek Philippe Grandmaster Chime (Ref. 6300A-010), which sold for a record $31 million in 2019, packs 1,366 parts into a case that measures 47.7mm and is only 16mm thick. That a team of watchmakers could even envision such a piece of mechanical wizardry is itself incredible!

The power plants for more affordable watches are often sourced from a third party like Sellita, a Swiss company that builds movements based on the expired patents of ETA. Building in-house movements is expensive and highly specialized so unless there are sufficient scale, economic or supply chain pressures, many watches in the affordable range are loaded with third-party movements. They are often functional workhorses without much finishing or decoration that are sealed behind a solid caseback like a car engine that’s rarely seen.

As prices increase, in-house movements become more common. Though they may not be highly decorated, many feature signature details like the red rotor on each Oris in-house movement. You’ll also begin seeing COSC-certified chronometers that are accurate to within -4/+6 seconds per day from brands including Mido, Norqain, Longines, TAG Heuer, Tudor and others.

On the high end, though, highly decorated movements crafted from precious metals that have been meticulously hand finished take center stage. They’re usually showcased behind exhibition case backs like the engine on a Ferrari F430, or visible on skeletonized dials. The process of striping, beveling, mirror polishing or applying any of the other finishing techniques is extremely labor and cost intensive. The work is performed by skilled artisans who focus their attention through the lens of a microscope, often for dozens of hours on a single movement. The result is art in motion. Flip over any Jaeger-LeCoultre, Breguet, GP, Chopard or Hublot and you’ll immediately understand.

Brand

Materials, movement and finishing are all fairly objective, but the value of the brand definitely falls more into the subjective category. Sure, hard costs like advertising, marketing and R&D are all factored into the final price of watch but so too is a premium that reflects the value of the brand. A good example is what is happening today with the value of pre-owned Rolexes. It is a perfect storm for the brand where several factors have combined to drive prices skyward. First, they are great watches with a timeless style. Second, there is scarcity in the marketplace, especially for new models. Finally, wearing one connotes a certain status that’s only enhanced as prices continue to rise and that’s directly tied to the value of the brand. Of course, the same factors apply to a Zenith, Carl F. Bucherer, IWC or any other great brand but not necessarily all at the same time.

About the Author

Bobby Frank is a freelance writer and musician based in Nashville. He’s been an avid watch collector since discovering a sample case full of early digital watches at his father’s office in the late 1970s. Current favorites include the Tudor Black Bay Fifty-Eight, Zenith Chronomaster and Jaquet Droz Grande Seconde Skelet One. A timekeeper to his core, Bobby plays the drums in several bands that perform across the Southeast including Tennessee Dead, a Grateful Dead tribute band.

Inexpensive vs. Luxury Watches

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