Expensive Watches and their History
Patek Philippe is known to be the most expensive watchmaking firm in history. The watches it produces are first among the most expensive watches in the world. Some of its most recent models sold for more than 11 million dollars.
Why are Patek Philippe watches so expensive?
History
One may very well start by looking at the current owners. The Patek Philippe watchmaking firm came under the ownership of the Stern family in 1932, during a turbulent period following the 1929 economic crisis. The Stern family was already a very well-known provider of high-quality quadrants. Both firms made a point of preserving the legacy of the Swiss watchmaking industry. Within a year, Stern had acquired the whole of Patek Philippe and the family still controls it today.
The people managing Patek Philippe have been working in watchmaking for centuries. This is the first reason why Patek has such prestige. Patek still represents the ancient dream of Swiss watchmaking, a family business producing excellent watches in their workshops in Geneva, Switzerland, surrounded by the Swiss Alps and their snow-capped peaks.
Craftsmanship
Besides those costs connected with research, development and design, the costs to train the watchmakers producing each single watch piece by hand need to be considered. Unlike other watchmaking firms, Patek Philippe produces all the necessary pieces for its watches, even the smallest components. Patek Philippe watches have no pre-made components. So, how would it be possible to ensure that enough specialized watchmakers are present in order to handle components and build watches? Finding the right talents is an ever-present challenge, and, like Mr. Stern says ”It’s not easy to telling a youngster ‘You need at least 15 years of practice before building up some skill’.
In order to tackle this challenge, Mr. Stern established the Patek Philippe Institute of New York, a facility having the task of training future watchmakers. The Institute offers a two-year traineeship including both theory and practice, as well as all the skills needed to repair watches. Some of the students are offered full-time jobs in the Manhattan offices of Patek Philippe.
Such initiatives allow Patek Philippe to remain a market leader.
Design
One of the reasons why the watches produced by Patek Philippe are so expensive is connected to the time the company spends in research, development and design to create new models.
Developing a new movement for Patek Philippe watches, for example, might require several years and millions of dollars in R&D. The research and development division of Patek is its operational core. Innovation would not be possible without it. 80 engineers work for this division, juxtaposing both old and new technologies to create designs keeping its billionaire customers satisfied. Such costs must be covered and they grow significantly every time the sales hit a slump. To understand how such a situation works, compare Patek Philippe with another watchmaking firm such as Rolex, which has similar R&D costs but significantly higher sales compared with those of Patek Philippe. As such, the costs Patek has to cover are distributed along a smaller number of clients.