There is a brief, interesting article on wthejournal.com in which Georges Kern discusses some details of the future direction of IWC. I include here a paragraph:
"From a production point of view, IWC is aiming for 100% in-house movements. Currently, Manufacture movements account for 60% of sales versus 2% to 3% a decade ago. "We need to pace this transition carefully," says Georges Kern. "It's a question of maturity. We need to ask ourselves when we can afford to pull out of the entry-level segment, which is currently the base of the production pyramid. It's about timing things right and making sure the customer can digest and accept this upgrade." In reality, IWC has been taking this direction for several years already with an increase in its range of in-house calibres. The reduction in the number of points of sale from 1,500 to 850 is part of this same strategy."
955 Discussions and CommentsMember since Jan. 2, 2012London,
United Kingdom
Thanks David for the insight. I'm definitely a fan of them moving completely in-house... but makes sense to manage the process carefully. An important consideration to first lure future long-term collectors in with affordable pieces...
2,283 Discussions and CommentsMember since Aug. 2, 2001
"pull out of the entry-level segment"???
In the US Midwest, there is a slogan that says to never eat your seed corn. I'm not sure how well that translates into other languages, but I really question that strategy for IWC.
They no doubt sell lots of watches to celebrities, athletes, and random wealthy buyers who are mesmerized by the great looking watch in the case. No battery needed? Cool!
But I suspect they also sell tons of watches to people like us who start with a Portofino or Aquatimer or Ingenieur or Mark xx and then move on up the line to add more complicated pieces such as Perpetuals in precious metal cases, collector BP's, and the like.
Far be it from me to tell anyone how to run their business, but to me the trick would be to replace the entry level segment with a new in-house movement that could be slightly more, but not say almost double in price. That may not be possible, however, without compromising quality.
19 Discussions and CommentsMember since Jan. 4, 2013
It is an interesting marketing strategy. As an analogy, I would use another luxury good that relies on craftsmanship, men's suits. Contrast two of my favorite suitmakers, Ermenegildo Zegna and Brioni. Both have a fine tailoring history. Zegna has created a lower cost line, Zegna, that is manufactured with cheaper fabrics and with less handiwork to appeal to more men; it is what would be called an "aspirational" line. They still have their very high quality suits sold in limited outlets. The hope is that the cheaper line is a gateway to the more expensive suits. In addition, you just sell more so you can make more money.
Brioni is resolutely high end. They cater only to high end customers and you will not find any compromise to their clothing. I think they use things like ties as an "aspirational" item for those who want something labelled Brioni, but without the costs of the suit.
IWC looks to be taking the second tack. By having only in-house movements, they will appeal to the connoisseur who appreciates that IWC controls every aspect of manufacture and will pay the premium that entails. Both Zegna and Brioni are doing quite well so both approaches work. I think it is just a corporate decision which way to go.
162 Discussions and CommentsMember since Sept. 19, 2012Abu Dhabi,
United Arab Emirates
I feel that IWC is currently in the sweet-spot of providing both in-house movement for enthusiast and in the same time catering for the 'entry-level' market allowing this exclusive brand within reach for most.
It would be interesting too see how IWC will develop new movement for all successful and reliable ETA-based movements models. This indicates that we're going to see more new in-house calibres in their future releases. I look forward to seeing these!
472 Discussions and CommentsMember since Dec. 18, 2009Northbridge,
Australia
It would be interesting to hear what is entry level and what is not. I can understand some of the Portofino's and the smaller DaVinci's of yesteryear being "entry-level" but to say a current Aquatimer 2000 is entry level simply because it does not have a in house movement is a bit of a stretch - yes, it is one of the cheaper IWC's at present but it is quintessentially IWC - maybe not as much as the now defunct VC Aquatimer but the current Aquatimer screams IWC as loud as any other and if not more.
The current Aquatimers sell so well because they are priced well (as well as being a great watch) - they are not cheap but not expensive either and to think that moving such a watch out of the "entry-level" by putting an in-house movement in it and doubling the price is an option is a bit of a shame - hopefully watches such as the Aqautimer are classed somewhere above entry level and will not receive this kind of treatment.
I whole heartedly support the move to in house movements but not for the sole reason of justifying higher prices and more profit. That said, when I purchased my first IWC, I would by nothing but a watch with an in-house movement (5001) but after buying a couple now without, I am happy either way, as long as it is a good watch and IWC are happy to put their name to the guts, I am happy to buy and wear it. I have 4 watches with in-house movement (MK XI on as I write this, 5001, 666 AD and 3227) and 2 without (3799 and 3568) and whilst I love them all, the 3799 and 3568 probably spend the most time on my wrist.
Cheers,
Ben
Time is something invented by the Swiss to help sell more watches
250 Discussions and CommentsMember since May 5, 2008
I love in-house. I bought an Aquatimer with a 7750 base in it because I loved the whole piece and respect the movement (it is still one of the most accurate I own and have taken it down 124 feet without a hitch) but now have not gone beyond in-house because it just means more to me. I know a $100 Casio can do the job just as well but not nearly as elegantly. I believe that IWC has already built affordable base movements that over time, with larger production runs and variations (double chronograph, split chronograph;)could reduce retail prices on an entirely in-house line of products.
314 Discussions and CommentsMember since March 14, 2012Western,
Slovakia
One could feel this direction away from non-in-house movements already some time but so far no one has said anything about the price. I could only assume that IWC knows what they are doing, otherwise they would not be on the rising wave, so to say, during the last years. What I mean is, there is no proof, that there should be something like the double price.
And surely I do not think it could be a question of quality. I sincerely hope IWC would not compromise in this direction. Never. Otherwise they could have had it already years ago. I think it could be more cost-related problem. Buying movements and supervising their quality is by this sale number probably more effective. To keep the standard even for a "simple movement" produced in house simply cost more unless you can produce a lot.
And that is what IWC is trying to do I think. Raise the attention to the brand even more, show who is the leader (not to offend any other brands, simply words of marketing :o) show the ability of innovation by refreshing the lines, bringing constant progress and so on which all sums up to higher sales. When they have that, they start produce entry-level movement themselves because the production numbers could be sufficient to cover the costs of the higher standards. And thus hopefully keep the price on the entry-level.
But the level will be, we do not know yet. It just would be unfair I think to judge negatively this aspiration unless we know for sure.
522 Discussions and CommentsMember since Sept. 7, 2008
Michael Friedberg Wrote:Far be it from me to tell anyone how to run their business, but to me the trick would be to replace the entry level segment with a new in-house movement that could be slightly more, but not say almost double in price. That may not be possible, however, without compromising quality.
Coming back to an old discussion: What about a shared production facility for base movements within Richemont with variations per company? I'm still curious if that will ever happen. (Or did I miss a development in recent years?)
"From a production point of view, IWC is aiming for 100% in-house movements. Currently, Manufacture movements account for 60% of sales versus 2% to 3% a decade ago. "We need to pace this transition carefully," says Georges Kern. "It's a question of maturity. We need to ask ourselves when we can afford to pull out of the entry-level segment, which is currently the base of the production pyramid. It's about timing things right and making sure the customer can digest and accept this upgrade." In reality, IWC has been taking this direction for several years already with an increase in its range of in-house calibres. The reduction in the number of points of sale from 1,500 to 850 is part of this same strategy."
Best regards,
David
Last edited: 13 June, 2013 - 05:31
Regards,
Thang
iwcforummer@outlook.com
Last edited: 21 April, 2013 - 08:55
In the US Midwest, there is a slogan that says to never eat your seed corn. I'm not sure how well that translates into other languages, but I really question that strategy for IWC.
They no doubt sell lots of watches to celebrities, athletes, and random wealthy buyers who are mesmerized by the great looking watch in the case. No battery needed? Cool!
But I suspect they also sell tons of watches to people like us who start with a Portofino or Aquatimer or Ingenieur or Mark xx and then move on up the line to add more complicated pieces such as Perpetuals in precious metal cases, collector BP's, and the like.
Just my opinion. Love to hear yours.
Dick L.
whichwatch at roadrunner dot com
Last edited: 29 January, 2013 - 23:44
Regards, Michael
mfriedberg@iwcforum.com
Brioni is resolutely high end. They cater only to high end customers and you will not find any compromise to their clothing. I think they use things like ties as an "aspirational" item for those who want something labelled Brioni, but without the costs of the suit.
IWC looks to be taking the second tack. By having only in-house movements, they will appeal to the connoisseur who appreciates that IWC controls every aspect of manufacture and will pay the premium that entails. Both Zegna and Brioni are doing quite well so both approaches work. I think it is just a corporate decision which way to go.
It would be interesting too see how IWC will develop new movement for all successful and reliable ETA-based movements models. This indicates that we're going to see more new in-house calibres in their future releases. I look forward to seeing these!
Vincent Fong
The current Aquatimers sell so well because they are priced well (as well as being a great watch) - they are not cheap but not expensive either and to think that moving such a watch out of the "entry-level" by putting an in-house movement in it and doubling the price is an option is a bit of a shame - hopefully watches such as the Aqautimer are classed somewhere above entry level and will not receive this kind of treatment.
I whole heartedly support the move to in house movements but not for the sole reason of justifying higher prices and more profit. That said, when I purchased my first IWC, I would by nothing but a watch with an in-house movement (5001) but after buying a couple now without, I am happy either way, as long as it is a good watch and IWC are happy to put their name to the guts, I am happy to buy and wear it. I have 4 watches with in-house movement (MK XI on as I write this, 5001, 666 AD and 3227) and 2 without (3799 and 3568) and whilst I love them all, the 3799 and 3568 probably spend the most time on my wrist.
Cheers,
Ben
Time is something invented by the Swiss to help sell more watches
Ben
And surely I do not think it could be a question of quality. I sincerely hope IWC would not compromise in this direction. Never. Otherwise they could have had it already years ago. I think it could be more cost-related problem. Buying movements and supervising their quality is by this sale number probably more effective. To keep the standard even for a "simple movement" produced in house simply cost more unless you can produce a lot.
And that is what IWC is trying to do I think. Raise the attention to the brand even more, show who is the leader (not to offend any other brands, simply words of marketing :o) show the ability of innovation by refreshing the lines, bringing constant progress and so on which all sums up to higher sales. When they have that, they start produce entry-level movement themselves because the production numbers could be sufficient to cover the costs of the higher standards. And thus hopefully keep the price on the entry-level.
But the level will be, we do not know yet. It just would be unfair I think to judge negatively this aspiration unless we know for sure.
Coming back to an old discussion: What about a shared production facility for base movements within Richemont with variations per company? I'm still curious if that will ever happen. (Or did I miss a development in recent years?)
Last edited: 7 February, 2013 - 18:18