The timeless appeal of steel watches

Picture: Tissot

Fine watchmaking is full of complicated concepts that are difficult to grasp. By far the most difficult to explain is the enduring appeal and value of steel watches, with some examples having the highest value in all of watchmaking. Worse still are the basic collection watches that fetch exorbitant prices by being encased in humble steel. This is why steel is sometimes referred to as unobtainium in watchmaking circles, given that it is potentially more elusive than even the same platinum watch.

Part of the reason for steel’s seemingly timeless appeal can be found in the key watches of the 1970s, namely the Audemars Piguet Royal Oak and the Patek Philippe Nautilus. To this, we could very reasonably add the Vacheron Constantin Overseas, the Royal Oak Offshore, the Aquanaut and the Girard-Perregaux Laureato, among others, as well as the entire catalog of all Richard Mille watches in non-precious metals. These types of watches are grouped under the category of luxury sports watches, and Richard Mille in particular has legitimized extraordinary prices for ultra-light watches.

On a completely different note, Grand Seiko put a nice finishing touch to the sports watch category, and thus gave tangible form to what prestige sports watches could look like. It is not for nothing that Grand Seiko has also brought innovation to timekeeping, with Spring Drive being the most exciting timekeeping achievement (besides mass production) of the past 20 years. Such exercises in chronometric excellence, combined with the excessively technical options of Richard Mille, to name only the entire automatic winding system, offer a showcase of what fine watchmaking can bring in terms of robustness.

Picture: Tissot

Richard Mille, Hublot, Roger Dubuis, Panerai and Audemars Piguet have also propelled luxury watchmaking into the unexplored realms of high-tech materials science. The incredible growth in value – even at the detail level – of these types of watches represents a marketing triumph. Not necessarily the type of marketing that creates desire, but one that emphasizes the real need for these innovative moves.

That’s not to say base metal watches are a gimmick – Rolex hasn’t even endorsed titanium yet, but that probably has more to do with its internal logic than any distaste or distrust of contemporary alloys and composites. Proof of this is notably the presence of ceramic, titanium and bronze cases in the Tudor range. Watch collectors eagerly awaited the introduction of titanium cases to the Rolex line, and it would indeed have a transformative effect on the entire watch trade. The key lies in the price segment in which these watches would fall.

Currently, titanium watches are generally more expensive than steel, and Rolex would probably only use titanium if it could achieve the same kind of shine that stainless steel can offer. Such innovation in finishing (or in material science) would require a higher price, thereby playing into the play of the so-called premiumization forces that currently dominate the market.

Here, the example of Audemars Piguet is most useful because CEO François Henry Benahmias has demonstrated the effectiveness of betting on the sale of fewer watches at ever higher prices. By relentlessly applying this strategy, Audemars Piguet has increased its revenue by a striking distance from Patek Philippe, while producing fewer watches. Oddly enough, Audemars Piguet, unlike Patek Philippe and Rolex, is firmly on the titanium path and actually made a titanium Royal Oak reference, but that was for Only Watch. Nevertheless, Audemars Piguet could have changed things in the Royal Oak game by introducing titanium for the standard 16202 model, but it chose not to. It could also do the same with ceramics, as it once did in complication territory, while charging a premium price due to the difficulty in achieving the desired finish.

Image: Audemars Piquet

Given how Audemars Piguet’s numbers look, it’s only natural that rivals are looking closely at the premiumization situation. The playbook would be simple – establish a popular steel model, then instead of ramping up production of that model, introduce precious metal variants and focus on selling ever more of those. There will be questions about where the best margins lie, but that can vary from brand to brand. Tissot exemplifies a fast-track version of premiumization history with its incredibly popular PRX model. It started with a quartz model, followed by an automatic, and now has a steel and gold version. We have no doubt that all versions of the PRX succeed to some degree, as the aforementioned playbook works like a charm.

Watchfinder and other specialists say gold is the next material of choice, and perhaps Patek Philippe will endorse it with gold-only versions of the Nautilus, as it did with the Ref. 3711. It certainly seems logical to steer the conversation away from collecting steel, at least for a while. Gold dramatically changes the value proposition and increases the retail asking price accordingly. This is becoming more important, and increasingly pressing, as secondary market prices for steel watches are approaching those for gold versions — in some cases they are already exceeding them.

Image: Patek Philippe

To close this segment on off-materials, let’s go back to Rolex. The brand is holding a masterclass to convince people to move up the value chain, so to speak, and get precious metal models if steel is simply out of reach. Let’s take the example of the Rolex Cellini, of which we never speak of an essential model, and also that of the Datejust, for a broader context. In the first instance, you’ll be hard pressed to even find a Cellini watch to try on, let alone buy right away. Here too, you will have to register your interest and wait.

In the second case, we can point out that you can still see and try the Datejust models, but you will not be able to buy any immediately either. The Cellini is only available in gold, and a significant part of the Datejust range is also only available in precious metals. Obviously, the demand for Rolex watches goes far beyond the professional steel sports watch category, but let’s look at what a typical watch buying journey might look like for this brand alone.

You would start, like no, with the Oyster Perpetual – it could be your first serious watch. After a few years you might decide something more substantial might be needed, and now you turn to the Oyster Perpetual Submariner with date. From there, you could also consider a Rolesor version of the same, or maybe even the all-gold model. If your wrist could handle it, you might even opt for the Sea-Dweller. From there you could go in many directions, but by now you will have charted a fairly specific course in the watch collection.

So, the progression here would be from a simple temporal collection, exclusively in steel, to another collection that also offers gold and half-gold options. Well, we say that’s typical, but you will indeed find it very difficult to run this course right now. You may have to go straight for this Rolesor Submariner… Again, if there’s a Rolex watch you want, and fortune smiles on you, don’t hesitate.

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About Robert L. Thomas

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