Help me understand watches and value

[zjpj83]

Of course, the price helps pay for the manufacturer's marketing and overhead and other costs associated with being a "brand."

However, watches can cost tens or hundreds of thousands depending on the complexity (and of course rarity). Ultra expensive watches don't just tell the time. They have various complications - perpetual calendar, minute repeater, tourbillon, chronograph, etc. Are these functions really necessary? No, not really. Are they cool? Well, mechanical beauty is in the eye of the beholder. One thing is for sure - they usually take years of R&D development, and the ultra complex time pieces can take one watchmaker months to put together. So - there's your high price.

 

[Enfant]

I beg to differ. I think the 'fallacy'--not logical mind you--is in analogizing watches with cars, however cheap or uber-expensive. There was once a book titled, "watches tell more than time", and I think the author was right on track.

Given that the use-value between $150 Seikos and $15000 Pateks are the same, the differentials can only lie in (1) symbolic value (2) precious metal value (3) "deliberate" scarcity. Patek is a piece of jewelry for men, period. Sure, it has great horological value, but at the end of the day, it is the 'look-good' factor that warrants the price differences. Or at least that's what many people believe in--sufficiently large to perpetuate this sort of pricing structure!

I think one would be hard pressed to find a platinum or gold Seiko but for Patek it is a different story. Such metals add value to the timepiece, something which is likely to appreciate over time than depreciate rather quickly in any car after you have driven it off the lot. As for 'deliberate' scarcity, I suppose it has to do more with very savvy strategic planning in a profiteering company than in any excuses on "we can only make so many a year"...It is true that good watchmakers are hard to come by; but if you can make money with it, I don't see why more cannot be made. Perhaps 5000 pieces a year is the optimal number between brand exclusivity and stockholders' pleasure!

 

[Metlin]

Originally Posted by Cary Grant

Why Sinn's technology may be superior to Omega's (or not).

If you go by technology, quartz is the most superior technology around. Yet, for whatever reason, quartz watches aren't particularly popular among the watch aficionados.

Personally, to me, expensive mechanical watches are analogous to spending a load of money on a steam engine driven vehicle when you've modern automobiles with ICEs (i.e. quartz watches).

No matter how pretty, it is still a steam engine.

 

[Metlin]

Originally Posted by Enfant

I beg to differ. I think the 'fallacy'--not logical mind you--is in analogizing watches with cars, however cheap or uber-expensive. There was once a book titled, "watches tell more than time", and I think the author was right on track.

Given that the use-value between $150 Seikos and $15000 Pateks are the same, the differentials can only lie in (1) symbolic value (2) precious metal value (3) "deliberate" scarcity. Patek is a piece of jewelry for men, period. Sure, it has great horological value, but at the end of the day, it is the 'look-good' factor that warrants the price differences. Or at least that's what many people believe in--sufficiently large to perpetuate this sort of pricing structure!

I think one would be hard pressed to find a platinum or gold Seiko but for Patek it is a different story. Such metals add value to the timepiece, something which is likely to appreciate over time than depreciate rather quickly in any car after you have driven it off the lot. As for 'deliberate' scarcity, I suppose it has to do more with very savvy strategic planning in a profiteering company than in any excuses on "we can only make so many a year"...It is true that good watchmakers are hard to come by; but if you can make money with it, I don't see why more cannot be made. Perhaps 5000 pieces a year is the optimal number between brand exclusivity and stockholders' pleasure!

That's a good point.

Effectively, it is an artificially induced scarcity over an inferior good that is extremely overpriced.

What's not to like?

 

[zjpj83]

Originally Posted by Enfant

I beg to differ. I think the 'fallacy'--not logical mind you--is in analogizing watches with cars, however cheap or uber-expensive. There was once a book titled, "watches tell more than time", and I think the author was right on track.

Given that the use-value between $150 Seikos and $15000 Pateks are the same, the differentials can only lie in (1) symbolic value (2) precious metal value (3) "deliberate" scarcity. Patek is a piece of jewelry for men, period. Sure, it has great horological value, but at the end of the day, it is the 'look-good' factor that warrants the price differences. Or at least that's what many people believe in--sufficiently large to perpetuate this sort of pricing structure!

I think one would be hard pressed to find a platinum or gold Seiko but for Patek it is a different story. Such metals add value to the timepiece, something which is likely to appreciate over time than depreciate rather quickly in any car after you have driven it off the lot. As for 'deliberate' scarcity, I suppose it has to do more with very savvy strategic planning in a profiteering company than in any excuses on "we can only make so many a year"...It is true that good watchmakers are hard to come by; but if you can make money with it, I don't see why more cannot be made. Perhaps 5000 pieces a year is the optimal number between brand exclusivity and stockholders' pleasure!

What you say applies to Calatravas only. As other posters, you are forgetting the matter of complications. Patek offers certain complications that Seiko does not.

 

[whacked]

Originally Posted by Metlin

If you go by technology, quartz is the most superior technology around. Yet, for whatever reason, quartz watches aren't particularly popular among the watch aficionados.

Personally, to me, expensive mechanical watches are analogous to spending a load of money on a steam engine driven vehicle when you've modern automobiles with ICEs (i.e. quartz watches).

No matter how pretty, it is still a steam engine.

This is entirely subjective. Microsoft Windows is not universally superior to Unix just because it came later, is(was) cheaper, and got more popular. There are more to watches than just keeping perfect time.

BTW, don't you read? djf881's post is pretty good.

 

[swiego]

I've never felt that cars were a good analogy. Cars with 10x the price tag often do come with a leading edge performance envelope; though the returns may be diminishing, they still are there.

Watch collectors strike me as art collectors. They appreciate and purchase the craftsmanship of others to hang on their walls, shelves or, in the case of watches, their wrists. Like an expensive painting or sculpture, these five figure timepieces have dubious functional value in relation to their price tag, but they have enormous symbolic value to the owner / collector. This I can understand.

There of course is one big difference. Art often can be created in a vacuum; an artist may create a work with no intention of profiting. Expensive watches, though works of art to the collector, are very clearly a business model to the manufacturers, who go through great lengths to trademark brands and control/maintain margins. Those who see the collector's side of the equation can't understand why people wouldn't "get" the value of a 5-figure wristwatch. Those who see the watchmaker's business side of the equation can't understand why people would support a business model that elevates art to such lofty price tags. Those in the middle simply say "neat watch" to a Patek and move on.

Personally I'm not one to want such art, however. Expensive art has always been a bit like reality TV for me: I think I'm simply more the sort who wants to be the one creating art than spending a whole lot of cash to display someone else's art in my home or on my body, so in that sense seeing someone wearing an expensive watch gives me a very neutral impression, not a blatantly positive one. I try to adorn my walls with my own work, such as it were, and would have a tough time paying extraordinary sums simply to own the work of others. But, to each his or her own.

 

[Pylon]

Though I certainly can't improve upon the great explanation written by djf881, this video by the fine craftsmen at A. Lange & Söhne should highlight a few areas where their watches differ, from say - a $3k Omega.

 

[Metlin]

Originally Posted by whacked

This is entirely subjective. Microsoft Windows is not universally superior to Unix just because it came later, is(was) cheaper, and got more popular. There are more to watches than just keeping perfect time. BTW, don't you read? djf881's post is pretty good.
Of course read djf881's post. That doesn't mean I can relate to it. Like I said, a mechanical complication is like making a steam engine run car have a mechanical turntable. Sure, it's complicated and perhaps vaguely interesting to some people, but at the end of the day, it is mechanical. In an era when you have way superior technologies that serve the core function, at that. Your analogy is flawed because at the end of the day, both Windows and Unix are parallel technologies. And both sacrifice some things (usability vs. security, for example). Doesn't make one superior or inferior. Also, they are both aimed at different functions (a Unix desktop is a poor end user environment and most Windows servers are poor back end environments). Also, cost is subjective. Some types of Unix may be free (e.g. Linux), however, there is the cost of time and effort into getting even the most basic functionality up and running. In the case of a mechanical watch, it is less reliable, more expensive, older technology that needs to be maintained and serves its core function very poorly. It neither functions properly as a time keeping device, nor as a piece of jewelry (to another poster's point, I can find a gold bar for the price of some watches).

 

[Metlin]

Originally Posted by swiego

I've never felt that cars were a good analogy. Cars with 10x the price tag often do come with a leading edge performance envelope; though the returns may be diminishing, they still are there.

Watch collectors strike me as art collectors. They appreciate and purchase the craftsmanship of others to hang on their walls, shelves or, in the case of watches, their wrists. Like an expensive painting or sculpture, these five figure timepieces have dubious functional value in relation to their price tag, but they have enormous symbolic value to the owner / collector. This I can understand.

There of course is one big difference. Art often can be created in a vacuum; an artist may create a work with no intention of profiting. Expensive watches, though works of art to the collector, are very clearly a business model to the manufacturers, who go through great lengths to trademark brands and control/maintain margins. Those who see the collector's side of the equation can't understand why people wouldn't "get" the value of a 5-figure wristwatch. Those who see the watchmaker's business side of the equation can't understand why people would support a business model that elevates art to such lofty price tags. Those in the middle simply say "neat watch" to a Patek and move on.

Personally I'm not one to want such art, however. Expensive art has always been a bit like reality TV for me: I think I'm simply more the sort who wants to be the one creating art than spending a whole lot of cash to display someone else's art in my home or on my body, so in that sense seeing someone wearing an expensive watch gives me a very neutral impression, not a blatantly positive one. I try to adorn my walls with my own work, such as it were, and would have a tough time paying extraordinary sums simply to own the work of others. But, to each his or her own.

Now that is a great way to look at it.

Because art is subjective, and perspectives on how much art is worth vary from person to person.

I guess my only problem is that it's almost like there is a factory of artists whose sole function is to make money, rather than make art. Sure, these watch companies make art, but that is only incidental. Their core goal seems to be monetary benefit, and I guess at that point, I am not sure if art quite remains the same.

 

[zjpj83]

Originally Posted by Metlin

Now that is a great way to look at it.

Because art is subjective, and perspectives on how much art is worth vary from person to person.

I guess my only problem is that it's almost like there is a factory of artists whose sole function is to make money, rather than make art. Sure, these watch companies make art, but that is only incidental. Their core goal seems to be monetary benefit, and I guess at that point, I am not sure if art quite remains the same.

Perhaps it is more helpful to compare watches to ultra-high end fine furniture. They are "art" in a sense, and you are paying for the design, but also "mass"-produced by hand by a craftsman.

It's hard to find a good analogy, but the fact that it's "dated" technology is irrelevant, because that's not what you are paying for - just like anything else still made inefficiently by hand today when assembly lines are as advanced as ever. You don't buy a minute-repeater because you need to hear the time played by chimes. Rather, it's something that is still made because they can.

 

[Metlin]

Originally Posted by zjpj83

Perhaps it is more helpful to compare watches to ultra-high end fine furniture. They are "art" in a sense, and you are paying for the design, but also "mass"-produced by hand by a craftsman.

It's hard to find a good analogy, but the fact that it's "dated" technology is irrelevant, because that's not what you are paying for - just like anything else still made inefficiently by hand today when assembly lines are as advanced as ever. You don't buy a minute-repeater because you need to hear the time played by chimes. Rather, it's something that is still made because they can.

Sure, but furniture is utilitarian at the end of the day. I don't necessarily think that "high end" (and I use that term loosely) watch collectors are going after "utilitarian" functionality.

 

[vitaminc]

cheap watches are like street angels... high end watches are like club escorts

 

[Cary Grant]

Originally Posted by Enfant

I beg to differ. I think the 'fallacy'--not logical mind you--is in analogizing watches with cars, however cheap or uber-expensive. There was once a book titled, "watches tell more than time", and I think the author was right on track.

Given that the use-value between $150 Seikos and $15000 Pateks are the same, the differentials can only lie in (1) symbolic value (2) precious metal value (3) "deliberate" scarcity. Patek is a piece of jewelry for men, period. Sure, it has great horological value, but at the end of the day, it is the 'look-good' factor that warrants the price differences. Or at least that's what many people believe in--sufficiently large to perpetuate this sort of pricing structure!


Thanks for the reply- I'm not trying to analogize cars/watches. rather, simply using that as an example of my understanding of one business case.

From what others are saying here, however, I believe they'd disagree with you if you leave out the quality of the works and the cost involved. the "mass-produced" nature of a $150 Seiko versus the hand-made engineering of a higher-end watch alone creates a significant price differential.

 

[coolpapa]

djf881, thank you for posting that, I really enjoyed reading it.