The Curious Case of Francis Ford Coppola

News broke (in fairness, more than a few days ago) that Francis Ford Coppola has made arrangements to have seven pieces of his watch collection placed at auction with Phillips. Most notable of these is this little wrist rocket -

Courtesy of Phillips

Curious to relate, this story (as far as I can tell, but then again I am not always the quickest of bunnies) has not really been picked up by Watch Town's Fourth and Fifth Estates. That, in and of itself, is a wee bit curious. But more curious than that is the (I've got to be honest) levels of glee expressed by the press, not least of which can be read in Stuart Heritage's piece in the Guardian -

Strapped for cash: why Francis Ford Coppola is flogging his watches

In the interest of full disclosure I have not seen his latest film, Megalopolis, so I can't really comment on the film's quality or possible lack thereof. But the buzz around the press (possibly planted by Coppola himself to generate interest) is that after investing $100 million of his money in what in hindsight has proven to be a failed venture, he needs the money. Well, maybe yes, maybe no. 

I would be disingenuous if I did not admit my own bouts of schadenfreude when it comes to the mishaps suffered by certain denizens of Watch Town. And in all fairness, I know of at least one major luminary with his own ubiquitous brand, and a handful of journalists (active and no longer so) who would feel the same about me. We are after all, human. 

But I want to propose another theory which characterizes my recent revelation that two things can be true at the same time. It might well be that Mr. Coppola is feeling the sting of essentially losing that large an amount of money. But at the same time, it might be that he has come to a point in his life where he realizes that he will have less and less control over the immediate future. He is 86 years old, and it is inevitable that at some point we all reprioritize what is important in our lives. In many ways, this ensures that his collection goes to (hopefully) a good home, and he will have some pocket money. 

In addition to the star attraction, other pieces on the block include the F.P. Journe Chronomètre à Résonance that was a gift from his late wife -

Courtesy of Phillips

In addition to these two unicorns, there is a pair of Pateks, a Blancpain, a Breguet, and an IWC.

If you are reading this, it is likely that you are at least at some level interested in watches. And perhaps this is just little me shouting into the void, but it's hard not to be romantic about watches. And regardless of the circumstances, this is an opportunity for folks out there who love watches and are fans of Mr. Coppola's work to own something special.

One final thought - and this is my own story. Back in 1992 I had been struggling for more than a year to find steady work and settle down after finishing university. I had moved to three states in less than a years time still hoping something was going to click. I was living in a room that I paid for by the week. I had sold almost everything of value I had left, save my grandmother's Omega watch. By some small miracle I was offered a teaching job in Japan. I leveraged literally everything I had left except my university ring, a few pairs of jeans, a pair of sneakers, some cds, and a bag to carry it all in. I bought a used suit for my new job, and needed a few hundred dollars more to be "safe" in my new job (I needed to buy my air ticket and have 1 month's living expenses). So down I went to the pawn shop, and my inheritance funded the last piece of my financial puzzle.

Since 1992 I have bought and sold countless watches hoping to get that same feeling that I had for a mid-sized Omega quartz watch that I wore maybe two times. I still haven't gotten there. But the idea that it is possibly still out there holds me in thrall.

In a long career Mr. Coppola has failed, recovered, prospered, and failed. And in fairness, doesn't that seem familiar to all of us?

I Know You Are, But What Am I? The Cubitus

Yes, this is about watches, but...

Shamelessly Borrowed from the World-Wide Infoweb

Stern, The Younger, has weighed in on the value of feedback. Living north of Boston, I am painfully aware of the mantra of New England Patriot's fans - "They hate us 'cause they ain't us!" I can honestly say I am not a fan of the Patriots because former coach Bill Belichick truly underscored what a lack of good sportsmanship looks like, and underscored that while everyone might "love a winner", it is not exactly a good look when trying to teach young (and not so young) people the value of being a gracious competitor. My neighbors say he's just very competitive. I need only look at the divide that exists in the Lower 48 today to see the trouble with that philosophy.

But back to watches -

Courtesy of Patek Philippe

With this launch, there was no shortage of feedback about it's looks, price, reason for being... Patek Philippe took a swing at the fences.

And Mr. Stern, well, let's just say he did not give the impression that feedback other than praise was worth considering. Per Watch Pro's coverage -

Responding to that criticism in an interview with Swiss newspaper Bilanz, Mr Stern shrugs: “I’m used to it, it doesn’t bother me. We all always get attacked when we launch something new.”

He dismisses the keyboard warriors on social media as “Haters,” and “People who have never had a Patek and never will.”

“What counts for me is the result,” he continues. “And I’m confident about the Cubitus because I have a good nose and a lot of professionals around me who tell me that it will work.”

Unlike a former owner, now employee of a large watch media outlet, I was not one of the two or three North American journalists air lifted out to Germany for the launch and face time with Mr. Stern. With that said, I have eyes and I have ears. The feedback I have heard from several current Patek owners, one of whom paid full-pop in a boutique, is not exactly full of warm and fuzzy praise for this design (and price) move. And regarding the visual aesthetic, I can honestly say that looking at it is jarring - and not in the avant garde sort of way that challenges my perceptions. I just simply don't like it.

Now in fairness to Mr. Stern's assertion - I have never really owned a Patek Philippe, and I won't be taking care of one for the next generation as I will be the last in the Henki line. With that said, may I make a suggestion that no doubt will be honestly considered (sorry, a little sarcasm to lighten the leaden election day hangover mood)?

It is never, ever wise to make too many assumptions about your customers. 

A Watches And Wondering Repeat - You Show Up Late To a Presentation? You Get a Night in the Box!

With yet another action-packed edition of Watches and Wonders nearly in the can, and the whinging and whining of Mr. Dufor regarding "pirates" still hanging in the Lake Geneva winds like a stale fart, I thought I might re-heat this one. It seems no matter who is running the high and mighty Swiss shows, they continue to make the same mistakes, never really bothering to learn from the past. So Ladies and Gentlemen, I present you with this reprise -

"You Show Up Late To a Presentation? You Get a Night in the Box!"

So it was not without some mirth that I was acquainted with the rules that have been set forth by the SIHH by a few different people who are attending.  This was shared over various conversations, so I need to be clear that I am only going by what I was told by some of my fellow members of the Fourth and Fifth Estate who have attended in the past and will attend this year as well.  Apparently, each attendee is provided with a briefing document that spells out the "behavioral" expectations of those members of the press who are attending.  I have been informed it is known as the "Code of Conduct".  And from the way they described it, it did not sound too dissimilar from a dormitory's rules list for a parochial / military boarding academy.  I mean, these are grown men and women traveling from the four corners of the globe to attend YOUR (Richemont's) fair at no small personal expense, and you essentially provide them a briefing document because you need to make sure that their behavior and attendance meets YOUR standards??? 

Anyway, it immediately brought to mind one of my favorite movies about journalistic pursuits in the luxury industry - Cool Hand Luke.  I will be paraphrasing here, so take this with the necessary amount of salt.

Shamelessly borrowed from the World-Wide Infoweb

Captain: What we've got here is... failure to communicate. Some men you just can't reach. 

Translation, you are all grown men and women who have traveled thousands of miles at no small expense, but we can't trust you to act like adults.  So were going to create a set of rules that you better follow, or you'll be spending the next Watches and Wonders with that asshole at the Blog Formerly Known As Tempus Fugit!

Shamelessly Borrowed from the world-wide infoweb

Shamelessly borrowed from the world-wide infoweb

Carr:  First bell's at five minutes of eight when you will get in your bunk. Last bell is at eight. Any man not in his bunk at eight spends the night in the box.
 
Translation, you better be on time for any event you are scheduled for.  And don't try that "I didn't have a watch" excuse!

Shamelessly borrowed from the world-wide infoweb

Carr:  These here spoons you keep with you. Any man loses his spoon spends a night in the box.

Translation, you have agreed to attend ruinously expensive dinners and cocktail parties.  It would be REALLY BAD MANNERS if you don't show up...ON TIME!  Miss or be late at your peril...


Carr:  Them clothes got laundry numbers on them. You remember your number and always wear the ones that has your number. Any man forgets his number spends a night in the box.

   
Translation, suit, tie, formal business wear.  Interesting to relate, one member of the Fifth Estate was banned a few years back for not complying with the dress code.  Calls were made, hands were wrung, tears were shed, and he is back in the fold.  Let's hope that Men's Wearhouse has something in his size (extra lumpy).

Shamelessly borrowed from the world-wide infoweb

Carr: No one'll sit in the bunks with dirty pants on. Any man with dirty pants on sitting on the bunks spends a night in the box.
 
Translation, Richemont and the SIHH is paying for a few nights accommodation for some of you (WHAT THE F*&K?), and not for breakfast and taxes. And for the rest of you, there might still be room at the YMCA, or you can sleep on a park bench.

So thank you for spending your time and your money to cover our brands - make sure you follow the rules, and enjoy your stay!

Shamelessly borrowed from the world-wide infoweb

Family Business

The word came down from LVMH HQ that Frédéric Arnault was now in charge of all things watches within the group. And with all due respect to Hodinkee (and if the comment section is anything to go by, I am not alone in my feelings), Mr. Anault's mercurial rise within the ranks of LVMH's watch division seems unlikely to happen anywhere else in Watch Town. The tone of the coverage from the 'dink was bordering on sycophantic. And not for nothing, it is understood that LVMH has invested in Hodinkee.

Family Business

It is not lost on anyone in the watch business that many of the most successful brands are businesses that have been started and run by individual families. Over time, several family owned brands made the decision to bring in outside talent to manage their brands. The recent departure of Mr. B at Audemars Piguet is a good example of this. AP could have engaged in the DNA Olympics, but opted for competent management that didn't happen to fall off the same family tree. 

It can also be said that there are family owned (and controlled) brands that have (by and large) remained in the family and gone from strength to strength - the name Stern still rings out loud and clear in Watch Town. But it is also important to understand that Thierry Stern grew up in the business, and spent years (not months) learning it. 

The Boss's Kid

I am no stranger to enjoying the largesse of perceived (and possibly real) nepotism. My father was a country club manager and as a teenager a job was arranged for me in the locker room of the Elyria Country Club where I spent my weekends and summers polishing members shoes and cleaning their golf clubs. I wasn't paid any more or less than my colleagues, but my hours were wildly elastic and absolutely to the benefit of my ability to go play in soccer games that my faither was coaching. I was not quite made the CEO of a watch brand, but I suspect the impact of nepotism (both perceived and real) has on the people you work with is a pretty universal and cross cultural one. You will always be judged with more than a soupçon of doubt.

Now it is safe to say that Mr. Arnault did not grow up in the watch business. And that is not necessarily a disqualifying factor. Several leaders in Watch Town came through different channels. But invariably, these folks had other experience in other industries. Mr. Arnault's CV prior to joining Tag Heuer was a little thin. His age at that time was in question by many. For me, in hindsight, I would not point a finger at age, but rather a lack of experience. We fast forward now some several years later, and Mr. Arnault certainly has some experience under his belt (both business and life). But to say that he single handedly made Tag Heuer a success is myopic (sorry Hodinkee). A lot of time and effort from a LOT of people before Mr. Arnault arrived paved the way for the path that Tag was and continues to be on. But as I have learned over more than 20 years in Watch Town, it is more often than not the family heir that receives the laurels as the last person standing.

Reality Check 

Regardless of what watch fans, the business world, or we members of the Fourth and Fifth Estate think and claim to be expert on, there is one simple, plain reality - LVMH is an extremely large, and by all accounts extremely successful juggernaut in the luxury business world. And with all due respect to all sides, it is a business that is essentially owned by the Arnault family. And to put it even more bluntly - Hublot, Tag Heuer, and Zenith were not exactly robust brands on their own. They needed (and still need) the group to support them, there is really no denying it. 

And One Last Bowl of Truth Soup

It is easy to be earnest and nostalgic about brands. It is even easier to shout that "I could do it better!" Watch fans are not entirely unlike fans of professional sports teams - we are a somewhat obsessive, overly opinionated lot that are convinced that if we were given the keys to the castle and a seat behind the big mahogany desk we would somehow know better and be hugely successful. And that just isn't true.

I think Mr. Arnault deserves the opportunity to prove himself now that he has landed in the hot seat. But to the historical revisionists out there, let's not forget that Tag's success is currently more down to the efforts put in prior. It doesn't mean Tag won't continue to prosper, but let's be real about assigning credit when we're handing out the roses ; )

The Power of (the lack) of the Press

As the curtain comes down on the one and a half watch fairs in Geneva, its's time to look back and take stock. For those brands that were not Rolex or Patek, the first day apparently didn't happen for you. And it didn't really get much better as the fair progressed. The big Richemont brands got some, but in all honesty not too much press coverage. 

(High) and Mighty Hodinkee covered:

Rolex - A LOT. In scrolling through their last week of coverage I ran out of fingers and had to switch to the Executive Publishers toes to try and keep count. Add in Tudor and you get a truly impressive number. Patek and Cartier also got a lot of ink. A little bit from Oris and the obligatory mentions for some other brands. 

And curious to relate? The "Dink" was not the only less than comprehensive outlet. By and large there were 3 or 4 Belles of the Ball, and the rest of the brands might as well have been showing their wares down the road at the Head...

Courtesy of Spotify

Sorry, too soon? Time to Watches crowed again about how awesome their show was, increasing a mighty 28% in terms of attendees and up to 55 brands! 5,800 people apparently made the journey to the U, which breaks down to an average of 105 (or so) visitors per brand (if you divide). Now knowing how much the organizers were charging for booth space, I would seriously question whether or not this was money well-spent. Moreover, if the press coverage of this Star-Spangled-Awesome event is anything to go by, it apparently never even happened. To be fair I am not monitoring every watch and fashion media outlet in the world, but I can say that based on the coverage of the great and the good in the Fourth and Fifth Estates, the silence has been deafening.

And here's the ironic rub - Watches and Wonders in their own Cock of the Walk fashion boasted about 5,000 or so retailers and something like 1,500 journalists. Think about that for a moment...

Some glaring realities were laid bare:

• As snotty and exclusionary (not exclusive, there is a difference) as Watches and Wonders is with its press accreditation policy, this is the first year that there has been notable backlash not only from the shunned, but the regular attendees. C'mon Richemont, what are you really afraid of?
• Without sufficient hotels within a reasonable commute, it is next to impossible to expect that anyone will make it to their appointments on time.
• Without better infrastructure, it is next to impossible to expect that anyone will make it to their appointments in time. 
• Without a wider diversity of brands, Watches and Wonders will never truly be on the level that BaselWorld was back in its best times.
• Without an actual, functioning public transportation system, well let's just say it's not an ideal situation if you're trying to get to either fair without the benefit of having your own car.

But for those of us on the sidelines, we'll keep watching and wondering.

Hey Kids, Let's Put on a Show!

And so it has come to this.  With several brands still licking their financial wounds after being strong-armed by fair organizers from the two big shows to make "amicable" settlements, there is now a third show slated for Lausanne, and we are all presuming that Rolex, LVMH, Bucherer and others are going to keep their word and head south and be next door to Watches and Wonders - or maybe be formally asked to join.  And this is presuming that Hayek the Younger doesn't opt to try and do SWATCHVILLE in Zurich at the same time.

Now I like BaselWorld as much as the next guy. Hell, I'd go so far as to say I like it more than most people. But the sad truth is that coming up with a new name is not going to wash the bad taste out of the mouths of several brands who had their feet held to the financial fire by the fair organizers.

So let's break them down, shall we?

Let's assume you are a journalist or retail partner. You decide to start your day in Basel -

Hour Universe:
BaselWorld - "The Big Payback" has been rushed through an extreme makeover that probably wasn't the best considered of plans. I suppose the idea was if you change the name of the fair, maybe brands will forget how they got hosed out of thousands of dollars for exactly ZERO services, and mountains of headaches. Remember that whole "if you take a negotiated deal we'll roll some of those fees to next year"? Well, I might be wrong, but I suspect when BaselWorld announced that the fair had moved from quacking duck to a a l'orange, so did the hopes of the brands of recovering any of their fees. While it may indeed be "We Time", I doubt very seriously that "we" will be paying back/forward any money from this past year. So pucker-up Buttercup, it's really Their Time.  

Now in fairness, if I have read the promotional materials correctly, they are stating that if the fair cannot go forward, monies will be refunded. But for many brand managers and owners that I have talked to, they are not feeling particularly warm and fuzzy about the whole idea. The only fuzzy most of them got from the organizers this past year was the fuzzy end of the lollipop.

Okay, now jump on a tram and get yourself to the SBB station and hop on the first thing smoking south. Allow yourself around 3 to 3.5 hours for transit between stations. Let's be honest, you will be better served to plan your whole day there.

We already know about Watches and Wonders which may have a Rolex/Patek/LVMH mini-show next door. But now that Hour Universe is back like the ghost of last night's stiffy, my money is on the big dogs being invited to join Watches and Wonders.

Now let's hop BACK on the train and zip over to Lausanne!

And now for my personal favorite (yes, that is sarcasm) - Imagination! 

Now with a name like that, well, I mean, just imagine...

Well, you will actually need to leave quite a bit up to your imagination, because a visit to their website will tell you exactly nothing. Actually, that's not fair. It will provide you with a zingy tag-line:

One World One Vision

It will also inform you that it is Coming Soon with a count-down clock.

Now on the one hand, you could argue that the fair is nearly 6 months away - c'mon, that's half a year!  Well, yes and no.  If the "count down" clock is anything to go by, it is 155 days away.  In fact, a closer look at the website does not exactly give a date. So perhaps the countdown clock is counting down to the day the fair dates will be announced? 

Spoiler alert - one of the brands I work with forwarded me the info - Imagination will take place from April 6 - April 11.  

Now consider that it is being held in a fairly large space that has all the warmth and charm of an airplane hangar.  Just imagine!

But then again, it could prove to be the "Richard Clayderman" of the April shows. He wasn't sexy, but if the commercial back in 1984 selling his albums was anything to go by, he was THE MOST POPULAR PIANO PLAYER IN THE WORLD!

From the original album cover

Oh, one last thing...

We still have that pesky problem of COVID-19...

The Laureato 42

From Girard-Perregaux -

Courtesy of Girard-Perregaux

I appreciate that there is a tribe out there that believes quite flatly that if you're not wearing a Royal Oak or a Nautilus, you are a pretender.

So while it is true that the Royal Oak came first, and was designed by Gerald Genta, I think in many ways the story of the Girard-Perregaux Laureato has a bit more of an intriguing past. If my understanding is correct, the original was in fact - quartz, as GP was one of the few Swiss brands to actually take the new technology seriously. It was also not the result of a famous designer but rather, the work of a (as far as anyone knows) anonymous Milan (that's Italy, not Ohio) based architect.  

Unfortunately, not unlike Girard-Perregaux itself, the Laureato has gone through more than a few twists and turns, some more unfortunate than others.  But it does seem that finally, just maybe, GP has settled on a design vocabulary for this collection, one that they will follow for more than just the next "season" or until the next CEO moves in. Here's hoping!

The pertinents for this one are as follows -

CASE
Material: Steel
Diameter: 42,00 mm
Height: 10.88 mm
Case-back: Sapphire crystal
Dial: Blue with "Clou de Paris" pattern
Water resistance: 10 ATM

MOVEMENT
CALIBRE
Number: GP01800-0013
Type: Self-winding mechanical movement
Diameter: 30.00 mm (13 1/4''')
Height: 3.97 mm
Frequency: 28,800 Vib/h – (4 Hz)
Number of components: 191
Jewels: 28
Oscillating weight: Steel
Finishes: Côtes de Genève, circular graining and bevelling
Power reserve: Min. 54 hours
FUNCTIONS
Hours, minutes, centre seconds, date.

BRACELET
Size: 27.00 / 18.00 mm
Material: Steel
Buckle: Triple folding
Buckle material: Steel

Smartwatches, and all that Glitters

Story by Francis Jacquerye

Preamble

Since the launch of the Apple watch in 2015, it has become a commonly accepted fact that smartwatches are out to take luxury watches. After all, sales of luxury watches are dropping and sales of apple watches have overtaken them... so it must be true, right?

Besides possibly ignoring economics trends and consumer behaviour, this reasoning seems to oversimplify the value proposition of luxury goods. If customers cared more about utilities (technical specifications) than luxuries, there would not be a $1,171 billion global luxury industry [1].

In this first part of the series, the author would like to look at how Apple influenced the conversation about smartwatches, and wether there are overlaps with luxury watches. The author has worked for both the luxury industry and the consumer electronics industry (within Swatch Group AG from 2007 to 2013 and Goertek Inc. from 2015 to 2019),  and has been an Apple customer for the last 10 years, so his perspective cannot really be accused of being partial or biased.

The Successful Contrarian

There is no doubt that Apple is a polarising company. On one side they enjoy an almost-cult like following, and on the other they are the subject of criticism.

Something that everyone can agree upon however is that the company's history could be divided into a pre Dot-com bubble [2] era (with an outspokenly anti-IBM Steve Jobs being ousted) and a post Dot-com bubble era, with Steve Jobs back at the company's helm and the company becoming a leader of market segments.

Image: Steve Jobs outside IBM's NY headquarters in 1983, photo Andy Hertzfeld/Jean Pigozzi. Reproduced under Fair Use / Fair Dealings 

In the pre Dot-com bubble era, Apple was defining itself as being contrarian to the mainstream computing corporations. Their chosen narrative presented them as a David against Goliath.

Image: Apple's 1984 Super Bowl commercial, directed by Ridley Scott. Reproduced under Fair Use / Fair Dealings 

« This commercial was classically disruptive... This wasn’t a machine where you were going to be kowtowed in the workplace, this was a machine for the young, innovative, entrepreneurial mind. It really inspires the creative individual to break free and start something different. » [3]

In the post-Internet era, Apple has defined itself as the "underdog". Their success stories always follows the same template: Apple enters an existing product category, releases their own improved version, beats the biggest guy on the yard and ultimately dominates the market.

They started with the iPod, which remains the most successful portable media player of the post Dot-com bubble era. They followed suit with the iPhone, which managed to spell trouble for industry leaders such as Blackberry, Motorola, Nokia and Sony-Ericsson; and continued with the iPad, which dominates the market of tablets.

The Biggest Guy on the Yard

In 2014 the market of smartwatches represented a modest volume of less than 5 million devices. Since there was no Goliath of smartwatches to pick on, Apple looked at the market of wrist wear and decided that the closest thing to a big guy were Swiss luxury watches.

This offered two opportunities: by name dropping luxury brands, Apple could avoid comparison on utilities with its direct competitors, they could lean on overlapping aspirational values with luxury brands and they could anchor the image of their smartwatches as quasi luxury goods.

Avoiding Comparison

Although it is true that Apple did use comparison with direct competition in the early 2000s (the LOL funny "Get a Mac" campaign with Justin Long) [4], they did promote the overall experience instead of focusing on utilities. Once that the company got the upper hand on portable media players with the iPod, and on smartphones with the iPhone, they could afford to focus on the brand experience. This tactic has the benefit of leaving adversaries with no other option that competing on utilities or price.

Focusing on Aspirational Values

Interestingly, this strategy is closer to luxury brands than consumer brands. Patek Philippe for example, promises customers to travel across generations.

Image: Patek Philippe's "Generations" campaign: « You never actually own a Patek Philippe. You merely lok after it for the next generation. »

As for Rolex, founder Hans Wilsdorf practically invented athlete endorsement and cemented the brand's promise to customers of traveling across the globe.

Image: Mercedes Gleitze, British professional swimmer and first woman to cross the English channel in 1927. Reproduced under Fair Use / Fair Dealings.

Apple's promise to customers is to travel with their mind. The company's stated mission is « ...bringing the best user experience to its customers through its innovative hardware, software and services. » [5]. Everything in the brand experience, from advertising, retail design, approachable staff, packaging, industrial design, interface and ecosystem upholds those values.

Image: Working at an Apple store. Image credit Apple Inc.

Using Anchoring

In order to cement the apple watch in the public's imagination, Apple used three elements of anchoring:

Firstly, when Tim Cook unveiled the apple watch in 2015 he pitched it against a shortlist of watch brands ranked by sales value. Half of the brands on this list belong to the High End segment, so it had the benefit of instilling the idea that the apple watch could by all means compare to the likes of Rolex, Omega or Patek Philippe.

Image: Tim Cook 2015 keynote, credit Apple Inc. Reproduced under Fair Use / Fair Dealings.

Secondly, the first apple watch edition features an 18k gold version, and it helped to cement the idea that if Apple wanted to play head to head with giants of the luxury industry, they could. But they ultimately would not, because Apple was probably producing the 18k gold watch at a loss. However it still served its purpose as a publicity stunt.

The apple watch 18K gold red

Thirdly, Apple sought a collaboration with Hermès, so even if the comparison with luxury brands or the release of an 18k watch did not work, the apple watch could at least benefit by proxy, from being associated with at least one bona fide luxury brand.

The Hermès apple watch edition

If Apple felt a need to use anchoring to position the apple watch as a quasi luxury item, this begs the question: where does the apple watch overlap with luxury watches?

Differences and Overlaps

Speaking of luxury watch brands or luxury brands in general, there are four characteristics that make their products different from consumer goods: namely purchase decision, scale, sustainability and resale value.

Purchase Decision

According to Prof. Henry Assael of NYU, most consumer purchase decisions can be summarised as complex buying decisions, dissonance buying decisions, variety seeking decisions or habitual buying decisions.

The author explored in detail what the model represents and how it can be applied to luxury watches in Understanding Luxury Brand Equity through Consumer Purchase Decision, but looking at Apple's shortlist of watch brands, Rolex, Omega, Cartier and Patek Philippe would probably fall into complex buying decisions: the customer needs a high involvement in gathering information about the brand, and there are numerous differences between competitors.

Longines and Tissot would probably fall into dissonance buying decisions: the customer needs a high involvement in gathering information, but there are few differences with competitors such as Certina, Concord, Ebel, Eberhard, Eterna, Frédérique Constant, Louis Erard, Maurice Lacroix, Mido, Raymond Weil or TAG Heuer.

Fossil and Casio would probably fall into variety seeking decisions: the customer needs a low involvement in gathering information about the brand, but there are numerous differences amongst competitors. This would typically be where all fashion and lifestyle brands belong.

Seiko and Citizen would probably fall into habitual buying decisions. The customer needs a low involvement in gathering information and there are few differences amongst competitors.

What is noteworthy about Apple is that they manage to tap into complex buying decisions with their brand equity while also tapping into variety seeking decisions because of democratic prices on their entry lines. By leaning on the most compelling buying decision categories, they leave competitors like Samsung to work with dissonance buying decision and low cost competitors to work with habitual buying decisions, which precisely try to compete on utilities and price.

Scale

Voiceovers of Sir Jonathan Ives on Apple ads try to convey the quasi luxury status of Apple products, by using hyperbole words such as "precision", "exquisite" and "craftsmanship". Regardless, the fact remains that Apple products are mass-produced and intended for intensive distribution.

Image: iTunes Match’s launch with iTunes 10.5.1 beta 3, The Next Web. Reproduced under Fair Use / Fair Dealings.

In theory there is no limit to how many consumer goods or how many consumer electronics can be manufactured. This is why the industry has managed to saturate the market of personal computers, laptops and mobile phones: every consumer who can afford it buys one, so the demand is in decline.

In contrast, luxury goods are constrained by a scarcity of raw material and a scarcity of artisans capable of turning these into finished products. not every consumer who can afford it can buy one, so the demand is rising. It is without surprise then that most luxury goods can only be sold through selective, if not exclusive channels.

Philippe Dufour, a living legend and a Swiss national treasure, takes more than a month to produce watches to a degree of finishing that puts Patek Philippe to shame. The fastest that he can work is with electrically driven and hand controlled tools.

Philippe Dufour, image source FHH Journal. Reproduced under Fair Use / Fair Dealings.

Sustainability

The sustainable dimension of luxury products takes various aspects: first, the source of raw material must not be depleted, so it is in the best interest of luxury brands to preserve an existing symbiosis or an ecosystem. I previously discussed the economic benefits of the luxury industry in an answer to « Does it hurt the economy when people spend on luxury goods? ».

Secondly, besides being produced with superior materials and according to a superior design, luxury goods can be repaired, which dramatically extends their lifespan.

In comparison, consumer electronics pose several human rights and environmental problems in how raw materials are harvested and processed. A race to release newer devices faster means that products do no longer have to be build to last long. Before the iPhone, the criterion for shock resistance was much more stringent. It would have been considered a design flaw it a screen broke the first time that a phone was dropped.

However, the iPhone had the effect of lowering the standard for a whole industry. Example like this have prompted the European Parliament to put laws into place to protect the interest of consumers and force manufacturers to build products that are more durable and easier to repair [6].

The iPhone and other smartwatches are almost always designed and built like consumer electronics, so they do not offer the same repairability as luxury watches.

Resale Value

Because their quantity on the market in finite, used luxury goods tend to appreciate in value over time because of the law of supply and demand. Typically, 40 years old luxury watches and more recent ones can easily be kept in perfect working conditions, because spare movement parts can easily be procured for movements, and most components such as crystal and gaskets are standard. There has been a push from dominant luxury brands to undercut independent repair shops and force a monopoly on repairs and servicing [7] so the customer's best interest could be in jeopardy.

To Apple's credit, the company is one of the few whose products are highly sought on the second hand market. Besides refurbished products that Apple officially sells in 21 countries [8] to a market of more than 2,300 million consumers, there is a thriving parallel repair and resale market around their products.

In 2015, Android Police calculated that Apple offered software updates for older devices up to 41 months in average, which was practically double that of Nexus android devices (21 months). From 2018 onwards, Apple has been giving customers the option to have their iPhone battery swapped, which according to CEO Tim Cook allowed customers to hold on to their iPhone a bit longer than before [9]. Asymco analyst Horace Dediu estimated that the average lifespan of an Apple device in 2018 was slightly more than 4 years [10].

Image source: Software Updates: A Visual Comparison Of Support Lifetimes For iOS vs. Nexus Devices - Martin Lobao, Android Police, September 2015

In Conclusion

The author tried to outline Apple's branding strategy to present their products as quasi luxury, which sometimes overlaps with luxury branding, particularly when it avoids direct comparisons with competitors and it focuses on aspirational values. When it comes to the apple watch, there are many differences in its production and distribution scale that makes a head to head comparison with luxury watches impossible. Apple does however manage to overlap with luxury watches by tapping into similar purchase decisions and by offering longer software support and superior resale value than its competitors.

In this series, the author will offer a different perspective of the observed drop in sales of luxury watches and will explain the "Kodak syndrome" and how it dominates the conversation. The reader will be offered an insight into radical changes that the Swiss industry undertook long before any hint of the 1980s crisis, and how they made it possible to manufacture smartwatches today. The author will try to show how comparing sales of smartwatches with watches works, except when it does not.

References

[1] Luxury goods worldwide market study, Fall–winter 2018, Bain & Company
[2] Dot-com bubble, Wikipedia
[3] How The Greatest Super Bowl Ad Ever — Apple's '1984' — Almost Didn't Make It To Air, Aaron Taube, Business Insider
[4] Apple’s Steve Jobs didn’t want those Mac-vs.-PC commercials to be LOL funny, Mike Murphy, Market Watch
[5] Investor Updates, Apple Inc.
[6] Making consumer products more durable and easier to repair, European Parliament
[7] Apple Refurbished Products: Should You Buy Them?, Juli Clover, MacRumors May 2019
[8] Rising Demand for a Declining Watchmaking Trade, Francis Jacquerye, Woodshores
[9] Apple CEO Tim Cook: Customers Are Holding on to Older iPhones 'a Bit Longer' Than in the Past, Juli Clover, MacRumors January 2019
[10] An analyst estimated how long Apple customers hold onto their devices — and the findings might surprise you, Edoardo Maggio, Business Insider March 2018

Left Behind...

What we know:

Rolex, Patek Philippe, Tudor, Chopard, Chanel, Bulgari, TAG Heuer and Zenith have officially left the building (or more specifically, Hall 1).

What we can be pretty sure of:

Seiko, Casio, Citizen (which actually includes more than a few other brands including Frederique Constant and Alpina among others), Bell & Ross, Carl F. Bucherer are probably going to sling their hooks and "Take their talents south, to Lake Geneva". And with those brands, any hope of having a fair in Basel will go with them.

BUT -

There's in fact, more than just one more twist in the tail to this shit-show. Because it bears mentioning that saying you want to leave BaselWorld does not, de facto, mean you will be welcomed with open arms to the Geneva Fair to be Named Later. Because the operating name says it all - FHH. Now it is important to note the language used by the initial breakaway group in their "See ya, wouldn't wanna' be ya" letter:

The new show, which will be linked to Watches & Wonders, organized by the Fondation de la Haute Horlogerie, is to take place at Palexpo. The aim is to offer partner brands the best possible professional platform, applying a shared vision to successfully meet future challenges in the watchmaking industry. It will also give crucial prominence to the sector’s expertise and innovations, both in Switzerland and internationally.

Other brands may also be added, according to terms that have not yet been defined. This new event will be geared predominantly towards retailers, the press and VIP customers.

And that is the kicker here.  Because when we talk about the five brands that initially split off, they clearly fit into a certain demographic in terms of "acceptable suitors" to join the Richemont circus.  And then, this is where it gets really interesting and there will be a chasm that opens between "luxe" brands and the rest.  And again, reading simply what is there and not even between the lines -
This new event will be geared predominantly towards retailers, the press and VIP customers.
So that means that a lot of press, a lot of potential retailers and pretty much all of the "great unwashed" (i.e. watch enthusiasts), are not really of interest.  

So we shall wait, and we shall see.

Stick A Fork In It

Word has now made it's way through the various networks and confirmed by at least 2 outlets, and as I write this I have just received an official confirmation from one of the brands in question.  

The short summary - 
Rolex, Tudor, Patek Philippe, Chopard and Chanel have untied their ships from the docks of BaselWorld and have set sail for...

Geneva.

Shamelessly borrowed from the worldwide infoweb

It would seem that a large block of influential brands that were still holding BaselWorld together have changed their relationship status from "It's Complicated" to "Single and ready to Mingle".  On the surface you could say that it's only five brands.  Well, four of those brands hold down a not-so-insignificant position inside of Hall 1.  

The FHH (Fondation de la Haute Horlogerie) and Rolex would appear to be the drivers of this move, at least if the press release is anything to go by. And no, gentle reader, it did not have to go this way.

So let's understand and embrace some realities:
You Don't Tug On Superman's Cape -
BaselWorld needs Rolex and Patek Philippe one hell of a lot more than Rolex and Patek Philippe need BaselWorld.  Sorry, but that's the truth.  

You Don't Try to Sell a Nickel for a Dime -
MCH and the fair organizers are not the only folks who dropped the ball here.  The city of Basel had numerous opportunities to address the annual gouging that has almost religiously taken place in terms of food and accommodation.  Instead, they opted to throttle the golden goose.  And while I did not study veterinary medicine or avian gynecology, I am fairly certain that dead geese do not lay eggs - gold or otherwise.

Don't Fake the Funk -
BaselWorld will now, unfortunately, fall into the realms of Richard Clayderman -

In all fairness, the US gave France Jerry Lewis, so it seems only fair that France gave us him.

Ultimately, it is going to be a tough proposition to keep going.  Simply put, who is going to fill the space?

I feel somewhat sick to my stomach about this, I wish it hadn't happened, I wish that there was better news.  But again, it did not have to go this way.

Unfortunately, insofar as these five brands go, it is now too late for calmer heads to prevail.  

Here is the release, as it was received -


ROLEX, PATEK PHILIPPE, CHANEL, CHOPARD AND TUDOR LEAVE BASELWORLD.

CREATION OF A NEW WATCH TRADE SHOW IN GENEVA IN COLLABORATION WITH THE FONDATION DE LA HAUTE HORLOGERIE.

Geneva, 14 April 2020 – Rolex, Patek Philippe, Chanel, Chopard and Tudor leave Baselworld to create a new watch trade show in Geneva with the Fondation de la Haute Horlogerie. The show will be held early April 2021 at Palexpo, at the same time as Watches & Wonders. This departure follows a number of unilateral decisions made without consultation by Baselworld management, including the postponement of the watch show until January 2021, as well as its inability to meet the brands’ needs and expectations.

The new show, which will be linked to Watches & Wonders, organized by the Fondation de la Haute Horlogerie, is to take place at Palexpo. The aim is to offer partner brands the best possible professional platform, applying a shared vision to successfully meet future challenges in the watchmaking industry. It will also give crucial prominence to the sector’s expertise and innovations, both in Switzerland and internationally.

Other brands may also be added, according to terms that have not yet been defined. This new event will be geared predominantly towards retailers, the press and VIP customers.

Jean-Frédéric Dufour, Chief Executive Officer, Rolex SA, and Board Member, Tudor, said: “We have taken part in Baselworld since 1939. Unfortunately, given the way the event has evolved and the recent decisions made by MCH Group, and in spite of the great attachment we had to this watch show, we have decided to withdraw. Following discussions initiated by Rolex, it seemed only natural to create a new event with partners that share our vision and our endless, unwavering support for the Swiss watchmaking sector. This will allow us to present our new watches in line with our needs and expectations, to join forces and better defend the interests of the industry.”

Thierry Stern, President, Patek Philippe said: “The decision to leave Baselworld was not an easy one to take for me, being the fourth generation of the Stern family to participate to this traditional yearly event. But life evolves constantly, things change and people change as well, whether it is at the level of those responsible for the watch fair organization, the brands or the clients. We constantly have to adapt ourselves, question what we do, since what was right yesterday may not necessarily be valid today!

Today Patek Philippe is not in line with Baselworld’s vision anymore, there have been too many discussions and unsolved problems, trust is no longer present.
We need to answer the legitimate needs of our retailers, the clients and the press from around the world. They have to be able to discover the new models from Swiss watchmakers each year, at one time, in one place, and this in the most professional manner possible.

That is why, following several discussions with Rolex and in agreement with other participating brands, we have decided to create, all together, a unique event in Geneva, representative of our savoir-faire.“

Frédéric Grangier, CEO of Chanel Watches & Fine Jewellery said: “Like its partners, CHANEL shares the same independence and the same desire to protect and promote the values, know-how, utmost quality and precision of Swiss Watchmaking. This initiative marks a key milestone in the history of CHANEL Watchmaking and is part of a long-term strategy, which began with the launch of this activity in 1987. This exhibition will allow us to present all of our new creations in an environment that meets our high-quality standards.”

Karl-Friedrich Scheufele, Co-President Chopard et Cie SA said: “Chopard first exhibited at the Basel fair in 1964 with a stand of some 25 square metres. After careful consideration, our family decided to support the Rolex initiative and retire from Baselworld – a painful decision. The creation of this new watch show in Geneva, in parallel to Watches & Wonders, will allow us to better serve our watchmaking partners and our customers. Through the alliance, these grandes maisons will also be able to collaborate in promoting the values and best interests of Swiss watchmaking.”

Jérôme Lambert, on behalf of the Fondation de la Haute Horlogerie Council said: “The Fondation de la Haute Horlogerie is delighted to welcome a new salon which will strengthen the historical Watch & Wonders event in Geneva next year in early April.”