IWC Schaffhausen

If not too abrupt, treading carefully, I think it to be possible to move to a higher segment. There is uncertainty of course, and there must be a will, not a necessity, to achieve this, call it the ambition to become part of the great happy few.

IWC had a lot of success the last few years, probably being able to sell a lot more watches than they could produce. You could then choose to try and sell the amount of watches you can produce, by rising the prices, and adding the quality and features to be able to do so. Like, only in-house movements. Thereby making more money, based on the well earned fame of the brand.

That would mean you lose some of your older, lower segmented clients. Some might come with you, wanting nicer watches and being able to pay for them because of their own career moves.

I feel this is what IWC wants to achieve on the long run, and I feel IWC could pull this off.

Kind regards,
Paul

What you do may not be so important, but it is very important that you do it well. (my variation of a saying by Gandhi)

Last edited: 31 January, 2013 - 20:47

dzul Wrote:I have the "unfortunate" circumstance of being a working class consumer with a more than healthy affection for IWC watches...actually a virulent case of the dreaded uhrenvirus. I traveled the road from my first Mark XVI to the CFDV carefully balancing my financial resources with my desire for the watches. I truly regret any move toward less and less accessable price points within the IWC line. I may never have the income to be able to afford the PPC of my dreams...but I would like to have some choices that I could afford. What I really suspect is that I'm just not part of the 'target audience' for the IWC of the future. I can still look at the pictures!!! LOL!

Jim,
I think you hit this right on the head. When I first started collecting mechanical watches I very carefully chose a watch which was reasonably priced. If not for this I would have chosen another brand. I think there has to be plenty of entry level choices to whet the appetite.

I think people should view this debate from the Richemont level. The Group has a portfolio of brands or Maisons. I think they have done a great job of managing the various brands as a portfolio (to some extent, in the same way that IWC manages its portfolio of sub-brands). The temptation for Richemont to reduce costs and pool resources or even base movements is there. If the consumer thought that an IWC was a JLC, Mont Blanc or B&M in another guise the brands would suffer. For example, AL&S is a brand and product line that should always be 100% in house. IWC is a combination of in-house and sourced movements. In the context of the portfolio of Richemont maisons, I can see the time when they may take the decision to position the brand at a certain price point and above with all watches having manufactory movements. However, it is important that there are distinguishing features between the brands/Maisons. For example, if I was an owner of a Ref 5041 Portuguese Sidereal and saw the same movement appear in another Richemenot brand, I would be hugely upset. From a Richemont point of view, maybe IWC should be positioned at say, $12,000 and above. If you want cheaper, then there are other products to satisfy that need.

The big question is whether the buyers of IWC's production of 60,000 pieces a year are bothered with this debate. It is most likely that they're not.

Last edited: 17 May, 2013 - 09:58

Rave Wrote:I think people should view this debate from the Richemont level. The Group has a portfolio of brands or Maisons. I think they have done a great job of managing the various brands as a portfolio (to some extent, in the same way that IWC manages its portfolio of sub-brands). The temptation for Richemont to reduce costs and pool resources or even base movements is there. If the consumer thought that an IWC was a JLC, Mont Blanc or B&M in another guise the brands would suffer. For example, AL&S is a brand and product line that should always be 100% in house. IWC is a combination of in-house and sourced movements. In the context of the portfolio of Richemont maisons, I can see the time when they may take the decision to position the brand at a certain price point and above with all watches having manufactory movements. However, it is important that there are distinguishing features between the brands/Maisons. For example, if I was an owner of a Ref 5041 Portuguese Sidereal and saw the same movement appear in another Richemenot brand, I would be hugely upset. From a Richemont point of view, maybe IWC should be positioned at say, $12,000 and above. If you want cheaper, then there are other products to satisfy that need.

The big question is whether the buyers of IWC's production of 60,000 pieces a year are bothered with this debate. It is most likely that they're not.

Rave, good point to take Richemont's perspective looking at all brands. Still, I believe it is possible to have a position that covers a large range of price levels and always have in-house movements. Look at Montblanc, for example. Also a Richemont brand.

You come from nothing, you go back to nothing. What have you lost? Nothing!

It's a strange thing perception... I don't see anyone complaining about the IBook utilising IBM Chips or the MacBook Pros using intel chips. I don't see anyone complaining about the iPhone/iPad using chips (A4, A5, A6) made by Samsung. In fact people will willingly spend a higher amount for the apple premium even though the hardware is predominantly outsourced.

The same applies for me with reference to IWC. As long as the watchmakers at Schaffausen approve and ensure the quality of ETA and Selita supplies then these movements are just as good as in-house ones, if not better. The whole in-house mentality is snobbery to a high extent.

Greater fragmentation may not necessarily be beneficial to the consumer and watchmaking companies, particularly with reference to costs. Not to mention servicing/maintenance...

Leon,

This is not a discussion about a high volume comodity, this is about a luxury good. People want to buy an exclusive product, something special. For al lot of people ETA/Sellita is not special enough. In house is a unique selling point.

I don't mind buying an IWC with a ETA or Sellita movement as long as it is to IWC standards. Problem for me is that it is not clear what those standards are. What makes a 30110 different from a normal 2892A2? There have been articles in the past about the modifications. But, that was when IWC did the modifications. What about today?

Regards,

Bas

I think it is a good decision in the long term. It is almost the reverse of what Porsche is currently doing which I think, ultimately, will hurt their brand.

As Valhalis noted,this is about a luxury good. People do want something exclusive and a bit special. That comes at a price.

Vahalis Wrote:Leon,

This is not a discussion about a high volume comodity, this is about a luxury good. People want to buy an exclusive product, something special. For al lot of people ETA/Sellita is not special enough. In house is a unique selling point.

I don't mind buying an IWC with a ETA or Sellita movement as long as it is to IWC standards. Problem for me is that it is not clear what those standards are. What makes a 30110 different from a normal 2892A2? There have been articles in the past about the modifications. But, that was when IWC did the modifications. What about today?

Vahalis

I second that, and I believe that most of the confusion about Sellita & ETA is coming from the fact that IWC chooses not to be transparent here. Don't get me wrong - this is not a judgement, simply an observation. We would not have discussions recurringly here about this topic if the transparency about how the standards are and what comes from IWC, what not, was different.

One difference in comparing luxury cars and luxury watches is however important: Both are buying parts from other companies; IWC gets cases, dials, hands, straps, springs etc. from external companies. So do companies like Porsche with some components as well, for example the lights or automatic gearing. However, a movement itself is the "core" of a product, like the engine to the car. So this is a point where people become "touchy" about. And - looking at the prices - I can understand that, even if I know that a Valjoux or Sellita movement is most probably not worse in terms of quality than an in-house movement, maybe even the contrary of that. However, we don't know for sure - talking about transparency. Just telling that IWC takes care of the quality of their product seems not enough for a passionate collector.

You come from nothing, you go back to nothing. What have you lost? Nothing!

Last edited: 2 February, 2013 - 11:07

Until the day they actually have a neutral show or magazine that actually puts all these movements (mass produced vs in house) to the test ie accuracy, durability, everyday wear, servicing speed and ease, spare parts availability, I will never be convinced that in-house is better than its mass produced and more experienced counterparts that have been in the market for much longer.

The point here is, if outsourcing makes the better watch given the brief/requirements, why switch to in-sourcing?

I won't say that the Nissan GTR is a high volume commodity, but its badass compared to many of its German rivals and the car is a combination and result of clever outsourcing/partnerships.