Baron - Mr Red
14613
Hey Mo...
You ask a truly interesting question. I have often wondered to myself if Patek is simply the King with no clothes. One day, someone will yell.."Hey, the King is totally naked" and everyone in an instant will realise that paying Patek prices is insane.
You are also correct, I believe, when you say that a number of independent manufacturers (as well as a number of brands) produce watches that have, at the very minimum, equal quality, movement, finish etc as a similar Patek but at a much lower price. I look at the finish on many of the Lange and just marvel. I look at the technical innovation and quality of some of the JLC and, again, marvel. So, yes I agree with you on this point too.
I also think you have a point insofar as the Patek marketing has allowed it to create an image of itself that separates it from the crowd. At a recent event show-casing all the 2013 novelties, all the manufacturers were grouped in a main hall. Patek, however, had hired a room that was about one-third as big as the main hall, but it was separate from the hall, with its own seating and staff. Brilliant marketing.
However, as time has moved on for me, I have come to realise something. As an artist, I think this will resonate for you. A few years ago, i took up painting. I spent some time creating a few pictures. I would say i have about 4 or 5 that i did. I love them. They took me ages to do. Picasso, on the other hand, was prolific. He produced tens of thousands of different pieces of art. Now, my exclusive and extremely time-consuming art would fetch maybe £10 in an auction, whereas Pablo's signature on a napkin fetches thousands (maybe tens of thousands). I have a friend who is a truly talented artist. Her work is technically superb. Her stuff fetches maybe £100. There are artists today who, technically, are superior to Pablo. But it is not technical competence that creates the circumstances for his world-record prices. Da Vinci is another case in point. Most modern critics say that the technical competence of Da Vinci is way behind today's artists. Yet, how much for a Mona (Nicolas....don't answer that?).
So, where does this leave me with Patek? Well, I think what Picasso and Da Vinci did was similar to what Patek have done. All of them were pioneers of their craft. All of them brought to the table a revolutionary new way forward. And, because of this, they gained the historical recognition that comes with such pioneering. Think of the first man on the moon...Neil Armstrong. Can you name 5 other astronauts? Think of the first manned flight.....Wright Bros. I have no idea who came next. First guy to climb Everest....Hillary. Pioneers make their mark and are subsequently demanded because of their historical importance. Now, in the case of Patek, they made their mark in a number of ways. When one looks at a modern Calatrava, and compares that with what one can get for the same money with an independent, well you are right to say that the value may be better in the independent. However, I don't think that equation of value incorporates the "pioneer" value that is embedded in the Calatrava. When I buy a watch, I want all sorts of things from it. One thing that I enjoy is knowing some of the history and uniqueness of approach. I know many guys who just want technical competence as the yardstick for value. That is one of many components for me. I also can see that there is a perception bridge to gap between a manufacturer like Patek and one like JLC......both have achieved pioneer status in my view...so why Patek over JLC? Well, i think this is like comparing two great artists...... both have massive price premiums over some of the independents. I would argue that is rightly so....just as I would argue that Picasso deserves his premium even though his work is prolific and not especially technically great compared with many. Picasso was a pioneer of something extraordinary. So too was Patek.
Has something changed?
I would be pleased to get some comments round the world - from China to USA. For the first time the new models of Patek arrived to the authorized dealers within just a couple of weeks after Baselworld. We have also seen some complicated watches like 5270G...
yes, they became too expensive the last years
Not so long ago my dealer had a 5270 and it wasn't sold yet I had never seen a 5970 in stock. Same with the 5070 - 5170 . The 5170j was easy to get 5070 was impossible and I'm sure the 5170G will be easy too. Not the first 12 months but within 2 years I'm...
Yes.
I think the old stoks are not moving well. Patek somehow decide a while back to allocate production capacity to the NEW models so that it can be in the market earlier to boost sales. Either that or Patek has increased their production capacity, just my 2 ...
It's nothing to do with sales it's two factors
1. Complaints from customers they have to wait too long after basel 2. All the models are out early as next year is 2914 175th and did not want customers still waiting on 2013 gear Mandingo
Geneva Salons to get new Bazel models in July -August, not earlier
I just came back from Geneva ( report to follow) and all new models to come July -August. P.S. 5227 and new 5205 in rose gold with white face is just A M A Z I N G !!!!!
Given how we appear to be steaming ahead at full speed...
...into a deep(er) global recession as demographics take over economies in the West and momentous growth elsewhere loses its... momentum, perhaps this is a sign of things to come.
View from China since you asked...
As you all know from the sales figures, a lot of inventory from Swiss manufactures gets exported to China/HK. And in China, the sole brand boutiques and the AD's are empty because nobody buys in China due to the huge luxury taxes imposed. So the well to d...
No customers
All the luxury shopping malls, like IFC, Plaza 66, have a number of sole brand boutiques which are pretty empty even on weekends. Breguet opened what must be their largest sole brand boutique in the world in Xintiandi, Shanghai, probably the most expensiv...
Have been to the PP Boutique in Beijing, recently.
Spent some great time with a very lucky Purist who picked up another beauty and I guess he is not the only one ... :-) But in general I get your point. Thanks, for the reply! Oliver
China to cut import duties on luxury Swiss watches
by 60% in ten years. This news just out. This will definitely add to the demand side equation, but it will take a while before the "news" becomes reality.
Quite clear to me
When Patek launch their batch of watches to all their dealers, the availability is there. But before buying, the natural reaction is to think it over, hesitate, think, brainstorm, let the watch grow on us, etc... and generally feeling comfortable as the w...
All are available.
In HK everything is available even the hard to find models. I'm a small client yet I've been offered every model including ultra rare models. Market has changed, uncertainty persists but rich are still rich. I'm waiting until 2014 for the 175th anniversar...
Yes, things have changed dramatically over the years.
It wasn't so long ago when Patek would introduce new models at Basel, it would take about 9 months for the pieces to show up at the dealers (remember ...about 9 months to make a Patek?). They did not have a feel for the number of pieces to produce until a...
I think it's the price point
The PP price point has exploded in the past few years. Basic models cost close to 30k and complicated models are over 50k....in SS. The % of the population that will spend that kind of money has grown much smaller in the past few years. There has been a h...
5270
I heard the 5270 was actually de-listed as an application piece. The sales and interest must not have been there.
Yes, Kari, a few things
Kari, good question. I think what has changed is this 1) China has slowed down economically and the Chinese were the biggest buyer --- less demand 2) Other brands and independents continue to offer more selection and variety at the high end --- more compe...
The reason why that there are more PP available
in the past 6 months is because the Chinese government are cramping down on the use of corrupted prices on expensive Cognac have also fallen in the past few months.
I tend to agree with the view that certain.....
Markets have slowed down. I was speaking with my AD this week and they informed me that they had been offered a larger number of MR than normal. When I asked why. His simple answer is that somewhere in the world the market has slowed down and Patek have a...
Here's my 2 cents
I think it's a few factors. A. There were very few true innovation changes this year. (Probably waiting for the "big" anniversary next year) B. Most changes were additional dial or material(J to G or R) roll-outs. Take the 5960p, so they produced a black ...
Thank you for your opinions.
Your point C is a very interesting one. Could it be so that people start to get tired with highest end watches and because the prices start to be insane, many of us are looking for new areas of interest. In my country it is cheaper to buy a brand new Pors...
It's too expensive!
It used to be fun, to be able to buy a "hard to get piece", enjoy it, and see the value increase over time. The watches were expensive, but still affordable. Currently, the prices are so high that the watches really require a lot of careful consideration ...
Car and watch - wrong comparison
While the car is depreciates every year and after 5 years holds 30% of its initial value, 5270 will loose 10-20% maximum of its value. IMHO
I am happy to tell you that you are wrong!
Go and buy i.e. 5170J, open the parcel and sell the watch next day. My guess is that over 35% of the value is gone if you sell the watch to a shop and if you are lucky to find a private buyer, "just" some 30%. And Patek Philippe is holding its value well....
Good point, but!
Kari, my personal example. I have bought BMW X5 in 2008 for 120k USD in Moscow. Last time i have checked the price at AD amd was offered 30k usd for 5 years car. In 2009 i have purchased 5130R for 30k usd - and after 4 years the price for pre-owned watch ...
Russian roads can kill anything!
If you dive with your Patek, it would also be very cheap after 5 years... But seriously: In 1950 a brand new Patek Philippe chronograph was costing 2.5 months salary of an average American. Today the corresponding model 5170J is costing 24 months salary o...
I have to agree with you, Kari.
Even on non-relative value basis prices are insane. The last example i have is new price for 5227. It would be 30k CHF. Compared to 23K for 5296 ( yours last choice) or 5127, i really dont understand what justified 7k difference? Gold officer back? Hinged...
I started to work for the Soviet Ministry
of Merchant Marine, Agency in Helsinki on 1st June 1974. So next week I have been working with Russia and Russians for 39 years. I agree about your analyzes of the problems but I would strongly emphasize this Idiot part! That country could be so rich and ...
Totally agree with Kari...
I know it is not "proper" to discuss these things on this forum, but I do think things are getting out of hand. That said, the watch industry is very cyclical, so we cannot blame the manufactures for milking it while they can, or they might end up like Co...
Watches can be art
and some of Patek's Grand Complications are indeed pieces of art. However, Porsche 911 is a mass produced product with limited production numbers and relatively much hand work. Just like i.e. 5270G. Best, Kari
are you sure about the price in 1950 ?
Because I remember an advertisement from 1972 .... An AP advertisement for the Royal Oak, it said this stainless steel watch was as expensive as a VW Beetle. Today both are ofcourse much more expensive than 41 years ago but the price ratio is still more o...
I am sure.
I have somewhere the price list and the price of a chrono was just the same as a ladies' watch with gold bracelet. This ladies' one my wife has with the Certificate of Origin and sales receipt from the Geneva Salon dated 2.1.1950. I can somehow understand...
Patek was 1,365 Swiss
and the average rate of exchange to US was 4.373 in 1950. In other words, this Patek was costing $ 312. Sad! Best, Kari
Kari, its a luxury world.
And its not the necessaries... Its a toys for big boys. The same as Porche, Graff, Hermes case for chewing gum, etc... My mother ( doctor in USSR) would never could buy even Calatrava for all her life earnings...NEVER. Most of my friends can afford Calatr...
My feeling nowadays is that we all here are
victims of very clever marketing. Luxury should be made in the best possible way with the best materials. The best human can make. But there is no definition of luxury stating that a good is a luxury good when the margins are getting insane. Many of us se...
Can we blame them?
Can we blame the manufactures for adjusting prices upwards if there is inherent demand driving these prices? I just think we all need to be smarter about our choices. It was demand that drove up the price of a Nautilus 5980, and demand that keeps women's ...
Perhaps we should stop before the
Moderator is getting mad. There are many great choices with more affordable prices. I am relatively happy with my watches and I can manage for quite a while without buying something new. My point has just been that the prices are getting crazy and the man...
By the way:
you just visited Geneva Salon. Did you take your 5127R with you? If you bought something, could we get the photos, please. What you said about your mother and her work as a Soviet MD is naturally true. The people had different priorities: needed bigger ap...
Kari, report on my Geneva visit to follow shortly!
Thank you for your thoughts, you have raised really important questions...
There is a very good and quite interesting book that
may shed some insight, Deluxe by Dana Thomas. While its focus is on fashion, the author does reveal some very interesting facts which I suspect could be attributed to the luxury watch industry as well. For the sake of comparison, a reference 96 in 1963 re...
great book...
Whit, Deluxe is a great book. I read it several years ago and it was very insightful about the notion and marketing of "luxury"... I remember the one quote by Bernard Arnault that I loved... when asked why he pivoted his family construction company into a...
Some more food for thoughts ...
a) The people/customers of Patek Philippe have changed? A few years ago there was a friend of my family and he was a gentleman with great taste. He was a successfull businessman and a real connoisseur on all levels. His (analog) camera was a Leica R, his ...
Thank you Oliver big time!
Indeed, you gave some food for thoughts. Many watch collectors own a huge amount of watches - such an amount that it is impossible to wear them all. I belonged to this group just some two years ago when my collection was over 50 watches. Now I can speak o...
Thank you all for a first class thread........
I found the subject and views most enlightening. I wanted to try and add to the subject, but after 5 minutes of writing and then deleting several times, I have decided to leave it to the members that understand the world markets far better than I :) Thank...
It's much easier to write when English is not
the mother tongue. There's no way to aim to perfection. Best, Kari
Agree Kari...
Am also someone who wears a Patek as a daily beater and agree it is the chosen activity/outfit of the moment. To find the 'perfect' wristwatch can be a challenge. Like you, the 5167 is finding plenty of wrist time; for me this includes swimming, off-road ...
You are a star Oliver...
Champion of diplomacy,elegance and a true gentleman......BIG+++++++111111 Mo
This is a good point - but is it symptomatic of other conditions?
If we are fortunate to be awash in cash and/or resources, can we still exercise the virtue of temperance, enjoy and appreciate what we currently have, or do we immediately go out and get (as Oliver calls it) the latest "dog" for our "stable"? I am not poi...
Down cycle
I have looked at this market in many ways and I think we are just in a down cycle. 1)Asia is soft 2) dollar is strong 3) solid equities market which (true alternative to watches) 4) supply is the same 5) lastly, rapid price increases affects the marginal ...
Hey that means prices can rise even more!
Unless another global economic slowdown occurs!
Recovery ongoing, shocks always possible but...
... One can argue that the recent effervescence of US and Japanese equities are a direct reflection of the market pricing in prospects of a stronger future. Not in all places, and global GDP expected to be pretty slow growing this year. But most forecasts...
If I may....
After reading the whole thread,I had quite a bag of mixed feelings...... First and foremost,here we are again,Patek forum and pricing/value discussion,it seems that the the connubium will never be eradicated from Patek discussions,not even amongst connois...
This is probably the healthiest attitude to adopt when it comes to timepieces
Bravo for articulating this!
Der Mo,
I do not think there is such a thing like "marketing evil". Furthermore, I also know pretty well what I spend and I do it without pressure from outside. I think that the price / value discussion happens around Patek Philippe due to the simple reason, than...
Dear Kari ...
at least one brand (a very famous one) comes to my mind which prices quite often above PP. Also during their press conference at SIHH, they mention the price for each watch and it felt like they are proud of it. Do they have to proof that they are superio...
Dear Oliver,
It happens and I think I know what you are speaking about. One of the problems today is that many still believe that the price reflects the value and the quality. I could without hesitation mention at least two brands whose prices have nothing to do with ...
Dear Kari, I agree 100% ...
and that is one of the reasons why it makes more sense to discuss value instead of prices :-) Too many customers accept cheap hands or cases, show off finishing ... because they simply don´t get it. As long as there are customers for something like this, ...
The same dear Oliver
Also in my case I have learned a lot from PuristS. Not only reading and discussing but also meeting the people and visiting different shows and producers. Value is the thing to worry, not the price. I have two wait still till 4th of June before picking up...
Everyone differs Kari...
Everyone has their champions,their favourite. The Patek commercial phenomenon is regardless the horological content. The marketing strategy was superb and it reflects in their collectability,value,premium etc.... Take another example,Rolex,or better vinta...
We will meet at least in Paris, Mo
Rolex is another brand I respect a lot. And when speaking about Patek, I am not blind and totally without reservations. I respect the marketing of Patek a lot, it is very intelligent and that can't be said about all the brands. Also, Patek represents a ve...
Hey Mo...
You ask a truly interesting question. I have often wondered to myself if Patek is simply the King with no clothes. One day, someone will yell.."Hey, the King is totally naked" and everyone in an instant will realise that paying Patek prices is insane. You...
Thank you Baron for great analyzes.
I pretty much agree with you. My only remarks are very personal: 1. I highly appreciate ALS's overall quality. I feel it's clearly over Patek. However, I do not like their design. For me it's too "Germanic" and lacking some sophistication. 2. With Indepen...
Yes and no Baron..
MMmmh,well the comparison between Art and watches do not stand as watchmaking is not Art......it could be art at best when you address it from a very enthusiastic perspective. I would say its more an huber refined,super duper excellence striving craft,ths...
Replied to Oliver's note below...
...but just wanted to thank you for bringing up these topics.
hmmmm ... NOT only Patek
through this post I read that these discussions always take place on a patek forum. Well I can't agree. On the purists but perhaps more on other forums there are always serious discussions when Rolex or Panerai adds another 5 o 7 % to it's listprice. Watc...
A good reason to discuss Value is
to hope that people would not pay insane amounts for something that is not worth the same. Thanks for your input. Best, Kari
In that case, value has to be defined!
For me it is based on knowledge, observations, experiences ... not that easy to "catch" ... and you can´t do it by brand.
I have to think about the definition.
And I agree, the value is not only related with the brand. It is also very much related with the model. My 5131G as an example represents very good value. It's a part of the original world time complication, the movement is nice and well-finished, the wat...
"market is always right" I disagree ...
at least quite often it is not the case. There are just/still too many customers without knowledge. But don´t get me wrong, I am not THE one who knows it all. At least I try to do my homework and to follow my own values. Your first definition of "value" i...
I don't think so...
When we speak about value, we can't close our eyes from the price. Let me take an example of "Watch X" List price 20 k AD's margin 35% Market price 10 k. So buying this watch with 20 k represents no value. But buying the say i.e. with 12 K, represents alr...
It is simple if we want to keep it simple.
You asked for definition but if we would try to find a definition that would define the value for everybody, it is impossible. There is no definition that would tell at the same time something that offers value to you and me, it would not work. Value can ...
"Rolex or Panerai" Those are not on my radar ...
for several reasons. What I had in mind were the brands from the well-known (at least in the past!?) trilogy of Haute Horlogerie. When we talk about "classical" watches with or without complication , at least one is even more "insatiate" when it comes to ...