Wednesday, April 9, 2008

Horology Market Predictions: Right or Wrong?

Interesting facet is that the last year conclusions (in my 2007 SIHH report ) of the current market trends displayed were quite accurate by simply looking over this year developments (as well announced novelties for this 2008 SIHH and BaselWorld).

What I wrote last time was :

"The prevalent market trends are:

- cases are growing and becoming larger due to overwhelming demand by the customers no matter what many do think
- with larger case sizes (and sometimes even without) the prices are exponentially increasing. If one would really use this parallel comparison seriously it would almost make you wonder how much each mm in size costs ;-)
- precious materials and in house movements are the norm to exclusivity (and again increasing in pricing)
- daring design experimentation as well usage of new materials (especially in the movement side of things) are the next frontier & reality for the daring few
- everyone taunts innovation & proficiency of their watchmaking yet only few actually deliver

MJLC is (in my humble opinion) the KING!"

Correct Points:

Pretty much I was spot on the ever growing case sizes and commensurately increasing prices (not surprised that even diehard Rolex is jumping to the new tune). They have been prevalent and present thought the whole gamme of horology although with a few notable deviants from that general strategy. More precious (including many rare hard to work with as well pronounce) materials have made their inroads into line ups of most brands. Basically “everyone” announced their “new in house” movements or at least that they’re working on one, thus brining another notch to their “exclusivity” (and escalating pricing). New experimentation with daring designs was a definite positive result of the daring few and even less of those who actually furthered the developments on the movement side of things. Lot’s of different news and announcements promising various effects, however in reality few actual deliveries (especially those that work in real life).

Lastly from everything that I saw from pre announcements again the biggest inroads for me were done by that true Manufacture house of Jaeger LeCoultre with the stunning new Gryotourbillon 2, AMVOX3 and lastly (but not the least) the fantastic reintroduction of legendary Polaris. I have to admit that Vacheron Constantine has me very intrigued with its Quai de I’lle line announcement. More about all the specific favored models at a latter time.

Missed point(s):

The thing is that I probably missed the most important market trend which now I year later seems very obvious which is limited/special editions phenomena that has overtaken almost every haute horology house. I mean just look at the Hublot which has practically used it to a T as its marketing strategy. Panerai, as usual has employed it as well, in addition to further legitimizing its even higher bracket pricing with its newly acquired ”in house” movements. AP is following the path of least resistance - need I really say anything more then yet another color of ROO or Scuba edition. Patek has not abated from this strategy except pushing it more towards the emerging Far East markets. Funny that even conservative stalwart like Rolex is changing its tune as well and introducing some more “Special” and “Anniversary” editions as well. Now Lange is in the game as well and I am sure many else are following the suit.

Hey don’t get me wrong I like to have Limited and Special editions models – not that I have something personal against them. They surely add a dash of exclusivity and some kind of importance when one is able to track them down and purchase the piece. The only thing is when a company does a special or limited edition that is in essence really not that special or that limited per se, what are they really creating? An easy exploitable marketing tool for creating sales without really doing that much additional work? Additional market demand with the today’s not so discerning buyer for that perceived and oh so elusive aura of exclusivity that one gets with those “special” pieces? Lack of ideas or really an easy way out for creating more sales and revenue in this current sizzling horology market? Is there a real one singular correct answer which satisfies all these queries? Whatever the real reasoning behind this all (and I mean from both sides of the looking glass) is that it is working, well at least for now. Since it does it will be exploited to the max until not one person, but the majority of us act collectively with our wallets. Please don’t take me for a pessimist, but rather the constructive critic which only says what is on minds of many which have been in this game of horology for a while now. Many companies have no other choice but to follow the 8 ball and take what is given to them. Many have been transformed from smaller workshop places of horology to parts of the conglomerates and have requirements towards their shareholders. Many have traded their glorious names of the past (together with their contributions to innovation in horology) for the profits of today to what consequence in the long run only the future holds. Despite it all my opinion is that I think we are going in the right direction. Eventually every renaissance (including this horology one) must bloom, grow, and expand to the point of no room to mature anymore and to die out again. No, not to die forever! Instead to refocus and restart again in the new direction (and presumably better one) in the process loosing many of the old bad habits that contributed to its collapse and following the path of positive influence. That I see as I real success coming out of this all. Let’s just hope that our favorites will emerge as survivors stronger then ever and following the other righteous path so beautifully exhibited in many of the great accomplishments seen so many times over the good last part of this decade.

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Daily thoughts, musings & interests about anything (mostly horology) that currently makes my soul & grey matter tick.