This whole luxury watch market thing is terra incognita to me
Comparing Apple to Rolex is apples and oranges. I remember living in New York 30 years ago and there was a thing called "The Rolex Drape". Dudes in expensive cars would drape their wrists over their steering wheel at stoplights so everyone could see the watch they were wearing. They were trying to get gorgeous girls, of course, and there were enough extremely high-paying jobs there that it was a credible play. Some of those girls were trying to get rich guys, and in New York at that time there were enough gorgeous girls that it was also a credible play. I remember walking past Cindy Crawford one early Greenwich Village morning when she only had a couple magazine covers, and we both did a double-take (I thought "is that the model ...?" and I imagine she thought "Nah!"). She might have been 17 then. Chevy Chase walked past a couple minutes later. Heck, last summer I was on Eastern Long Island and got a long speculative look from a gorgeous young woman at an outdoor table. I think not much has changed there.
I remember Rolexes costing about $10K. There were cheaper ones, of course, but back then you *had* to have the right watch and the right car if you wanted to even talk to the "right" girl. It didn't take me long to opt out of that scene.
The luxury watch market may still be like that, where those who buy them either have the kind of goose that they can collect $10K watches (probably more like $20K now) or wannabes who found a way to get *one* on the cheap or else bought a fake. Back then there were so many fake Rolexes being sold for under $100 from card tables on the street.
For Apple to have sold more than any other watchmaker but Rolex last year is ridiculous. Apple sells $500 watches. Rolex sells $20K watches. The Hodinkee website I've linked a few times chronicles this well, I think, and they are not alone ... there's enough money in the luxury watch industry to support full-time promotional writers. Like this guy at Forbes, bless 'im. Speaking of Hodinkee ... their lead story right now makes the world seem upside-down.
I bought a nice watch 15+ years ago. Not for anything like $10K, just a nice, simple, elegant-looking analog watch from the jeweler who'd custom-made my wife's wedding ring. A truly nice man. He was exiting the business and getting rid of inventory at bargain prices. I bought the watch as a gift for my cousin, who was about 11 then. I might've spent $60. Then I learned that my cousin didn't like wearing watches. 10 years later my oldest son didn't like wearing watches either. Heck, I stopped wearing watches 25 years ago ... didn't like the imposition of knowing exactly what time it was every damn minute. Being watch-less seemed like freedom to me, and I still don't wear one. Eventually, the watch I'd bought to be a gift had its battery die.
Last year I heard that my son wanted a watch. He didn't like having to pull out his phone every damn minute just to see what time it was. On his next visit home from college I told him I could fix him up, and he seemed intrigued. I showed him the watch and the "deal" was done -- he got a free watch and ... I got rid of the watch I'd been sitting on for 15 years. 'Course, I had to get the battery replaced first, but that support industry still remains, at least for now. Last time I saw him, which was last month, he was wearing that watch and it looked good on him. Bless 'im.
I think that people who buy a Rolex don't do so just to know the time. I think they do so kind of as an investment, kind of because that's what they think they need to buy to get gorgeous girls in places where at least some gorgeous girls think status symbols matter. But it's not just Rolex in the luxury watch industry ... it's all the other players on this slide:
Who are all these players the Apple Watch just leapfrogged? Truly, I don't know all of them. I know that Rolex, Omega, Cartier, and Patek Philippe sell seriously expensive watches, while I believe Citizen, Seiko, and Casio do not. Yet despite the Apple Watch having a lower selling price than the luxury brands, Apple Watch total revenue exceeds all of them except Rolex, which is kind of a big deal.
Is it enough to move the needle when Apple already dominates profits in a much larger industry (iPhone)? Maybe not, or at least not *yet*.
I still want an Apple Watch. Haven't gotten one yet. I expect I will eventually. Rolex, not so much. :-)
Now, if I've cast aspersions on anyone in the market for a luxury mechanical watch I should probably apologize. Truth is I don't have the goose to pursue that kind of grail, so ... apples and oranges. It doesn't mean I don't appreciate at least some of what at least some of those buyers want: art, fine engineering ... value inelasticity. Bless 'em if they can afford that ... I can't. |
