To help place the Apple Watch within the context of other luxury watches, we invited Benjamin Clymer, founder and executive editor of luxury watch site HODINKEE, to paint a picture of the market for us. Sure, you could spend $10,000 for an Apple Watch Edition, but you could also buy a classic Omega Speedmaster for roughly the same price — and the Speedmaster won't ever need a software update.
At today’s Apple Watch announcement we learned just what it can do and how much it will cost. Comparisons between "smart" watches (about which I write maybe one-and-one-fourth days of the year) and traditional mechanical watches (about which I write some 364 days of the year) have been the topic of much discussion since September’s pre-launch. Since then, I have been asked, oh, I dunno, 15,000 times, how I think the Apple Watch will impact the traditional watch market. Will Apple Watch be the number one watch in the world by year-end? Undoubtedly. Will it put a lot of smaller, low-end watch brands out of business? I sure hope so. (I mean that there are simply too many brands doing too little interesting work, and it’s time to trim the fat.) But the biggest difference between Apple Watch and a mechanical watch is how they are priced, and what one actually gets for the money they pay at different price points.
Update: Read our review of Apple Watch.
With Apple Watch, the price differentiation between the entry-level Sport at $349, the standard Apple Watch at $549, and the Edition at $10,000 is about perceived value — what materials are used in the case, bracelet, and straps, but also how much people believe they should be paying for the product. In addition to perceived value, mechanical watches are also priced by human value: how much of the work is done by hand (in many cases using 200-year-old methods). For example, a watchmaker named Philippe Dufour makes just 12 watches per year, alone in his one-room atelier in the mountains of Switzerland. A simple, time-only piece can cost $100,000. Whether the case is gold or platinum, the price of a Philippe Dufour watch remains (roughly) static — you are not paying for materials, you are paying for Mr. Dufour’s time and touch. The Apple Watch has minimal human value, and that is the biggest difference between it and its mechanical counterparts.
Just how much human value can a customer expect from a mechanical watch, relative to a similarly priced Apple Watch? The difference is startling.
$350 and below: Seiko Recraft, $285
All versions of the Apple Watch, even the most expensive, are made in China, with very little hand-assembly. For $350, you will get the mechanical equivalent — Chinese-made, machine-assembled, high tolerance. In spite of little to zero human value, a watch in this price range from the likes of a Seiko or Swiss Army could indeed last a literal lifetime. Any digital watch, from Apple or others, simply wouldn’t stand a chance.
$500 - $10,000: Omega Speedmaster '57 Co-Axial, $8000
The largest segment of the luxury watch market exists within the $500 – $10,000 range — these are the Apple Watch customers. Breaking the $500 barrier will not provide much more in the way of human input, but it will give you the opportunity to own a something from a well-established Swiss brand like a Hamilton or Tissot. The watches are still machine-made and use simple movements and pre-built mechanical kits, but might now yield the all-important "Swiss Made" signature on the dial — meaning that 50 percent of the components were created in Switzerland. As you approach $1,000, you begin to see offerings from the likes of Officine Autodromo and other thoughtful, boutique lifestyle watch brands. You may or may not get a "Swiss-Made" watch, but you will get a clearly thought-through brand and message, as well as membership to an "insiders club." The components of these watches remain "unfinished," meaning they are not polished or beveled to make them more attractive, which can ultimately be up to 50 percent of the cost of a fine watch.
At $1,500 you get into some really interesting pieces. These watches should almost all be Swiss Made, and while you are still using very simple, off the shelf movements, there is a chance that you might find one that has been adapted to be either more precise (like this Tissot) or more interesting (like this Hamilton). Here you begin to see open casebacks to show off those nice mechanical movements that gear-heads love so much. Still, much of the work done on these watches is machine labor.
Break $3,000, and you can safely say you’re buying a truly high-end watch. Around this price point, you begin to see either a) some hand-craft or finishing or b) an "in-house" movement, meaning it was not sold as a kit by a supplier but rather built entirely by the watch company to its own guidelines. This Tudor, for example, shows excellent build quality and a superbly finished case — though the movement remains outsourced. Contrary to that, the likes of Frederique Constant and NOMOS offer simpler cases but movements made completely in-house, without the help of anyone else.
Above $5,000 one should expect both an in-house movement and some hand-finishing, with details not only recognized but put at the forefront. Here you begin to see blue-chip offerings from the likes of Omega, IWC, and Rolex. These are the watches that many aspire to own, and some have become downright legends. The Rolex Submariner and GMT-Master, the IWC Portuguese, the Omega Speedmaster and Seamaster, the TAG Heuer Carrera, and other icons of watchmaking reside in this category that straddles supreme wearability with great style and true craft, without being obscenely expensive. Still, these watches are not devoid of perceived value — the majority of watches here benefit from multi-million-dollar advertising and branding budgets, conditioning us to believe they are worth the price of entry.
$10,000 - $20,000: IWC Portugieser Hand-Wound Eight Days Edition "75th Anniversary," $11,500
Few casual consumers break the $10,000 mark for mechanical watches — this is usually left for either the extremely wealthy or the extremely dedicated. Thankfully for us at HODINKEE, there are enough die-hard mechanical watch lovers out there to balance out those with simply too much money to make the discourse on timepiece in this category fascinating. From $10,000 to $20,000, you are into the realm of watchmaking where everything you see is original and interesting — or at least should be. Consider fully ceramic chronographs, stunning hand-wound dress watches, or modern legends all fall within this range — all featuring truly in-house movements with a moderate amount of hand-finishing to internal components. These watches will be assembled by hand, completely in Switzerland and offer the incredibly low tolerances and extreme quality for which this industry is known.
The infinite beyond: Patek Philippe 5270G, $176,300
At and above $20,000, you begin to enter the absolute highest echelons of mechanical watchmaking. Here the human value of each watch can make up 50 percent of the final retail price. There are two different roads one can take in this category of uber watch — either the Mr. Dufour route where the watches are simple looking, but incredibly finely finished and beautiful from the rear (similar to these), or one can trend toward "complicated" watches. These watches can, for example, keep track of the date, including leap years, for over 200 years at a time. If a watch is complicated and incredibly finely finished, the price compounds into the six-figure range — like a Patek Philippe perpetual calendar chronograph. In this range, almost anything goes and the human value should always be significant. Further, there is really no end-point for the price someone will pay for a watch — the most valuable watches in the world are in fact from last century, produced entirely without the aid of computers. This means that all vintage watches hold even higher human value than most of the expensive complicated pieces of today. The ne plus ultra of mechanical watchmaking is the Patek Philippe Henry Graves Supercomplication, which sold this past November for $24,000,000. Why? Because it is not only incredibly complicated, with 24 distinct functions, but designed and built entirely by the human hand — something the Apple Watch will never be able to claim.
And that is a wonderful thing.