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Watches Have to Be Worth the Money

The “handmade” label may not be enough these days to entice consumers to buy a watch. Here’s what’s needed.

Watchmaking since the 18th century has been dominated by the tradition of producing watches by hand. This was the philosophy when watch brands rejuvenated or resurrected themselves after the 1970s quartz crisis, when the deluge of cheap quartz watches threatened the existence of mechanical timepieces.

From the ’80s onwards, demand increased exponentially but has peaked recently – and the future, with its increasing economic uncertainty, is looking decidedly less rosy. Last year, Swiss watch exports, the bulk of which comprise luxury timepieces, to the rest of the world were essentially flat. The value of exports grew just 1.9 per cent, while volume fell 3.6 per cent. Industry observers are predicting a slow 2014.

So what will drive future growth in the industry? Practicality – specifically, useful complications or functions – will be a strong driver of demand. Consumers will buy more watches, even very expensive watches, if they deem them worth the money.

I see two developments upping functionality and usefulness across the price spectrum. The first is the growing use of new materials in the escapement. Although materials like ceramic and carbon fibre have long been used for decorative elements on the outside, it is inside the movement where new materials will be truly useful.

The escapement is a watch’s regulating organ – comprising the balance wheel, hairspring, pallet fork and escape wheel – that keeps the hands moving forward at a constant rate and provides the distinctive tick-tock sound.

The parts of the escapement are delicate and react to environmental factors like temperature (say, from humid outdoors to air-conditioning) and magnetism (speakers, medical equipment and so on).

The “cure” for this in Swiss watchmaking has been silicon, which is frictionless, lightweight, hard and non-magnetic. And the particular form of silicon used in watchmaking has an oxidised surface, which negates pure silicon’s reactivity to changes in temperature.

Omega, for one, now makes watches equipped with silicon hairsprings on a large scale. And last year, it unveiled the Seamaster Aqua Terra >15,000 Gauss, a wristwatch with the highest magnetism- resistance rating ever, thanks to the extensive use of new materials.

High-end brands are taking the new materials route, too.

Patek Philippe has successfully experimented with silicon in several limited-edition timepieces, and other brands, including Jaeger-LeCoultre and Breguet, are getting into the game.

Other materials – like artificial diamond, which has been used by Cartier – offer similar advantages to silicon. But regardless of the material, the progress in timekeeping due to materials science will gradually make its way down the price spectrum to more affordable timepieces.

The second technical development that will make watches better is a better mainspring – a long, coiled metal wire. The mainspring provides the torque that drives the watch movement.

For the longest time, most mechanical watches had two-day power reserves, meaning they would run for around 48 hours when fully wound.

But a short power reserve is an inconvenience, especially for a collector who likes to rotate his watches, since it means having to wind and set a watch each time it’s worn.

Power reserves have got progressively longer, and longer power reserves have become more common.

Watches that ran for seven or eight days were once a novelty, but three-day power reserves are increasingly widespread, which means a workday watch can be taken off on a Friday and worn again on Monday, without having to wind or reset it.

Week-long power reserves are common, too, especially at the higher end of the market. Patek Philippe, IWC, Panerai and Jaeger-LeCoultre are just a few brands that offer week-long power reserves. And, as with all forms of technology, they get cheaper in the long run.

Recently, Oris unveiled a mid-range timepiece (priced in the region of $8,000) with a 10-day power reserve. This brings to mind the car industry, in which airbags, ABS and other features were once exclusive to Mercedes-Benz and other premium badges. Now, they’re standard.