470 Discussions and CommentsMember since March 22, 2001vicenza,
Italy
The Great In-House Movement Debate? Prizes, too...
When the cal. 5000 arrived, I think that my heart skipped a beat. Not only because it was an in-house movement, but for its peculiar characteristics. In principle I prefer in house movements, when they have really something to say. I mean, if we take the jubilee portugueser, the movement is full of history itself, it's many decades old and bears a lot of tradition, could I say heritage. The same applies on a more modern way to the 5000 family, it's the continuation of the tradition of the original IWC automatic movements. In this case it's not a matter of heritage, but more of keeping alive a very peculiar design of the automatic winding. So, I would not consider an in house movement just because it's in-house made.
3 Discussions and CommentsMember since March 13, 2004
The Great In-House Movement Debate? Prizes, too...
As a wristwatch enthusiast, I feel that in-house movements are better than the ETA movements found in some of the current IWC models. IYes, WC customers should care to some extent. However, at this time the prices for these models (Aquatimer, Mk XV, Flieger Chrono) are affordable and I feel that the majority of IWC owners would not like to see prices increase to the Blancpain, Audemars and Breguet segment due to the addition of in-house calibers. I firmly believe that IWC can go head to head with any of those companies right now (due to their elaborate refinement of the movements), and does not need to produce their own movements to surpass them. I think that the price point for the sportier IWC models is a great advantage for IWC. So in that case, we should care, but not if models cost 25% more than they do now.
I really don’t think IWC is losing a market edge, because the target market is not exclusively comprised of those who demand in-house movements. There’s a certain aura to the in-house design and manufacture, however there has to be much more research made to draw the conclusion that the target market will be more drawn to the brand because of this. The movement is only a small percentage of the whole design. For instance, what percentage of Rolex’s 900,000 annual customers buy the watch due to the in-house movement? Do they even care? I honestly don't think so, as Rolex is known as being more of a status symbol than anything else. IWC caters to a much broader market than watch enthusiasts, and all in all, the market’s perception of IWC as a brand is very strong. As a matter of fact, I know a lot of people who would rate IWC on top of Rolex, even if Rolex sports an in-house movement.
That being said, the engineers and managers at IWC must focus on the thin line between the cost and necessity. They should not lose sight of the mystique behind IWC. They are at the forefront of horology and are globally recognized as being innovative, timeless and sophisticated, without using in-house movements for all their watches. I think they would lose more market share by incorporating an in-house movement and raising their prices than by continuing to tweak the ETAs. Also, one has to consider the amount of time it would take to develop, test and re-test the new calibers. The last thing IWC needs is for the newer in-house movements to be less dependable than the current workhorses.
In conclusion, IWC’s competitive advantage stems from excellent tradition, a sense of community, manufacturing technique, a passion for thorough engineering, and foresight/innovation, NOT copying other brands or listening to the critics. In that case, in-house movements may be very appealing, but the additional cost for the company and the customer might be too high to overcome.
8 Discussions and CommentsMember since Sept. 3, 2002
The Great In-House Movement Debate? Prizes, too...
I usually only lurk on this site (everyday) but this subject prompted me to respond.
First, I'm a huge IWC fan and have purchased 5 IWCs over the last two years and plan to buy the new Aquatimer 1000 as soon as my dealer gets it in. I think I'm fairly typical of the average IWC customer/fan. I like the history of IWC and respect what they have accomplished.
I like that IWC makes their own movements and I also like that they bring us beautiful watches with reworked ETA movements at fair prices. The fact is, if IWC starts replacing their ETA movements, the retail prices are going to go up sharply and I don't believe the reliability would be increased. In fact I think the opposite would happen on reliability.
As an example, take a look at the retail of the Glashutte Pilot with in-house movment. Easily twice the price of the Mark XV.
IWC, I hope that you keep bringing us great new movements in the future, but please don't forget the $3000.00 to $5000.00 crowd. (US dollar)
13 Discussions and CommentsMember since Aug. 6, 2004
The Great In-House Movement Debate? Prizes, too...
Speaking as a happy owner of an AT2000 with a 2892 beating steadily inside it, I must say that I'd be somewhat happier if it had an in-house movement. This is my purely emotional, personal opinion - I intellectually understand the reasons for the use of the ETA movement, but I would still prefer an IWC movement.
Speaking as a highly experienced consumer marketing professional, I'd also be in favor of IWC's phasing out the use of outsourced movements: no matter how much finishing and upgrading IWC may do, the story still doesn't resonate with the brand promise. As a matter of positioning, first as a premium brand, and second as a brand which seeks to differentiate itself on technical and engineering prowess, IWC's use of high-volume stock movements (yes, yes -they are only kits that are tried and true designs, blah, blah, blah ... ) that can be found in umpteen (mostly much cheaper) other watches creates dissonance in the mind of the buyer.
170 Discussions and CommentsMember since March 29, 2001
It depends........
The demand for luxury goods is inexact. And, IWC watches are luxury goods. It does not follow that lower prices, allowed by less expensive movements, will increase demand for IWC watches.
To the contrary, economic theory holds out the idea of a "Giffen Good" for which the demand increases as the price increases.
I don't think IWC watches are such a good right now, where higher prices might mean more exclusivity and more sales.
Frankly, I think the movement issue is one discussed by about 2% of the IWC watch buyers, and only a fraction of those people are on this board.
The other 98%, including the dealers, ask if the watch is good looking, a fair value, and semi-exlcusive. Sad to say, but, I don't think most buyers of IWC know of or care about the movement inside.
In fact, most salespeople in dealers do not know or care either. Retailers in general want watches that sell themselves (Rolex Daytona) or watches that they can push, that reward them with a higher-than-normal margin.
So, if I owned IWC, and didn't care about profits or market share, and jsut wanted to produce fine watches, I would make more in-house movements.
HOwever, if I am Richemony, I need a return on my investment, and I want to increase production volume, and increase margins, so, I continue to mass-produce watches with outsourced movements, while simultaneously investing in new, complicated, in-house movements, that move my overall brand upscale, but, which represent a small fraction of my overall sales.
715 Discussions and CommentsMember since March 22, 2001
Some thoughts...>>
1. One problem with the use of insourced movements is that the cost of the basic movement from the original manufacturer is more transparent. We don't know what IWC pays ETA for a 2982, but we can see similar (maybe not identical) movements for sale to get an idea of the basic range.
This, unfortunately, leads to the comment, "You paid that much for a watch with a movement which only cost $xxx?"
2. Explaining the work that IWC does on the movement does not, in my opinion, effectively counter point 1.
3. The problem is economic, rather than technical.
4. The ETA movements used by IWC may be best of breed, but the monopolistic nature of the industry means that the range of competition is small to nonexistent.
5. The experience of Jaeger LeCoultre seems to show that a it is possible for a medium sized company to survive without depending on insourced movements.
6. Finally it comes down to a matter of faith by the corporate management. The prospect of having to discard a complete technology in the event of a major market downturn, as happened in the 1970s, must be daunting. The difference is that now IWC is a core part of a major international conglomerate. Then it was initially a small independent family business and later a disregarded, non core part of an engineering conglomerate.
7. A tentative way forward: IWC should design a new replacement movement for the ETA 2982. To minimise investment the parts should be produced and perhaps assembled by JLC's existing manufacturing base. On proof of the technical and economic concept IWC's own manufacturing capacity should be expanded to include the new movement.
324 Discussions and CommentsMember since Oct. 7, 2002Stockholm,
Sweden
The Great In-House Movement Debate? Prizes, too...
The whole history of watchmaking has been window-dressing to a large extent. Look at the clocks and watches from the 19th and early 20th century. While there were a lot of technical experiments (of which only a few ever made it beyond a few prototypes) most of them used mainly standard technology wilth a more or less elaborate case.
It is still the same today - the technical differences between an ETA movement and the in-house movement of any of the brands is very small. So technically there is no reason to have an in-house movement.
Still, when I eventually buy a new IWC I will not even look at the ETA-based waches. There are several of the current watchws that I really love: The split-minute chronograph, the Fliegers etc. But I will want something that is different from the other brands, and then not only on the outside. So for me the question has only one answer: If the watches are to be interesting in the long run they must have pure IWC movements.
1,870 Discussions and CommentsMember since Oct. 28, 2002
I agree with John B.
when he says : "However, if I am Richemony, I need a return on my investment, and I want to increase production volume, and increase margins, so, I continue to mass-produce watches with outsourced movements, while simultaneously investing in new, complicated, in-house movements, that move my overall brand upscale, but, which represent a small fraction of my overall sales"
But why can the outsorced movements can't come from JLC ? They did it in the past, why not now ? That would take away the scepsis ( true or false ) that some customers have for a "budget" caliber , and would make another Richemont company a bit more profitabel by spreading the development cost over a larger amount of movements.
1,888 Discussions and CommentsMember since June 13, 2001Mansfield,Notts,
United Kingdom
The Great In-House Movement Debate? Prizes, too...
Lets assume that IWC bought out the ebauche manufacturing company supplying IWC with the base movements would we then say that IWC made all its own movements "in house".? Whilst it would be great for IWC to make this claim the sheer economics of it would certainly drive up the costs to the end user due to high investment in tooling etc which would be necessary. To me there is nothing wrong in any watch manufacturer outsourcing ( as in most other industries ) as long as they are produced to the very high standards required by IWC ( I think that's the key). Constant evaluation and upgrading through a dedicated movement maker will keep IWC at the cutting edge of the industry. If IWC has te intention of going fully "in House" then its better done gradually over a decde or two.
1,997 Discussions and CommentsMember since Oct. 31, 2001
The Great In-House Movement Debate? Prizes, too...
I have to say that I’m a big fan of in-house movements, with in-house movements IWC can give their watches their own special IWC heart/characteristic. I therefore like to see more in-house movements and hope that IWC is going to use less ETA movements ((only using a base-plates and some gears would already be a great improvement -> new Cal.3000 ?)) On the other hand I understand that for economic reasons it’s necessary/preferred to “share” movement parts with other companies. As already suggested above JLC would in my opinion be a perfect supplier for parts for IWC’s “regular” movement. IWC can then add their own specialities and assemble/finish the movement. Hence I also hope that IWC keep producing the “classic” components like the beautiful Cal. 89 screw-balance and the Pellaton winding mechanism. I also believe that the movement issue is discussed by the minority of the IWC watch buyers. I’m however confident that it is more than the 2% mentioned by John B and that it thus matters to use in-house movements to enhance IWC’s own identity.
When the cal. 5000 arrived, I think that my heart skipped a beat.
Not only because it was an in-house movement, but for its peculiar characteristics.
In principle I prefer in house movements, when they have really something to say.
I mean, if we take the jubilee portugueser, the movement is full of history itself, it's many decades old and bears a lot of tradition, could I say heritage.
The same applies on a more modern way to the 5000 family, it's the continuation of the tradition of the original IWC automatic movements. In this case it's not a matter of heritage, but more of keeping alive a very peculiar design of the automatic winding.
So, I would not consider an in house movement just because it's in-house made.
Ciao from Vicenza
Alex
Last edited: 21 January, 2013 - 22:25
As a wristwatch enthusiast, I feel that in-house movements are better than the ETA movements found in some of the current IWC models. IYes, WC customers should care to some extent. However, at this time the prices for these models (Aquatimer, Mk XV, Flieger Chrono) are affordable and I feel that the majority of IWC owners would not like to see prices increase to the Blancpain, Audemars and Breguet segment due to the addition of in-house calibers. I firmly believe that IWC can go head to head with any of those companies right now (due to their elaborate refinement of the movements), and does not need to produce their own movements to surpass them. I think that the price point for the sportier IWC models is a great advantage for IWC. So in that case, we should care, but not if models cost 25% more than they do now.
I really don’t think IWC is losing a market edge, because the target market is not exclusively comprised of those who demand in-house movements. There’s a certain aura to the in-house design and manufacture, however there has to be much more research made to draw the conclusion that the target market will be more drawn to the brand because of this. The movement is only a small percentage of the whole design. For instance, what percentage of Rolex’s 900,000 annual customers buy the watch due to the in-house movement? Do they even care? I honestly don't think so, as Rolex is known as being more of a status symbol than anything else. IWC caters to a much broader market than watch enthusiasts, and all in all, the market’s perception of IWC as a brand is very strong. As a matter of fact, I know a lot of people who would rate IWC on top of Rolex, even if Rolex sports an in-house movement.
That being said, the engineers and managers at IWC must focus on the thin line between the cost and necessity. They should not lose sight of the mystique behind IWC. They are at the forefront of horology and are globally recognized as being innovative, timeless and sophisticated, without using in-house movements for all their watches. I think they would lose more market share by incorporating an in-house movement and raising their prices than by continuing to tweak the ETAs. Also, one has to consider the amount of time it would take to develop, test and re-test the new calibers. The last thing IWC needs is for the newer in-house movements to be less dependable than the current workhorses.
In conclusion, IWC’s competitive advantage stems from excellent tradition, a sense of community, manufacturing technique, a passion for thorough engineering, and foresight/innovation, NOT copying other brands or listening to the critics. In that case, in-house movements may be very appealing, but the additional cost for the company and the customer might be too high to overcome.
I usually only lurk on this site (everyday) but this subject prompted me to respond.
First, I'm a huge IWC fan and have purchased 5 IWCs over the last two years and plan to buy the new Aquatimer 1000 as soon as my dealer gets it in.
I think I'm fairly typical of the average IWC customer/fan. I like the history of IWC and respect what they have accomplished.
I like that IWC makes their own movements and I also like that they bring us beautiful watches with reworked ETA movements at fair prices.
The fact is, if IWC starts replacing their ETA movements, the retail prices are going to go up sharply and I don't believe the reliability would be increased. In fact I think the opposite would happen on reliability.
As an example, take a look at the retail of the Glashutte Pilot with in-house movment. Easily twice the price of the Mark XV.
IWC, I hope that you keep bringing us great new movements in the future, but please don't forget the $3000.00 to $5000.00 crowd. (US dollar)
Mark
Speaking as a happy owner of an AT2000 with a 2892 beating steadily inside it, I must say that I'd be somewhat happier if it had an in-house movement. This is my purely emotional, personal opinion - I intellectually understand the reasons for the use of the ETA movement, but I would still prefer an IWC movement.
Speaking as a highly experienced consumer marketing professional, I'd also be in favor of IWC's phasing out the use of outsourced movements: no matter how much finishing and upgrading IWC may do, the story still doesn't resonate with the brand promise. As a matter of positioning, first as a premium brand, and second as a brand which seeks to differentiate itself on technical and engineering prowess, IWC's use of high-volume stock movements (yes, yes -they are only kits that are tried and true designs, blah, blah, blah ... ) that can be found in umpteen (mostly much cheaper) other watches creates dissonance in the mind of the buyer.
The demand for luxury goods is inexact. And, IWC watches are luxury goods. It does not follow that lower prices, allowed by less expensive movements, will increase demand for IWC watches.
To the contrary, economic theory holds out the idea of a "Giffen Good" for which the demand increases as the price increases.
I don't think IWC watches are such a good right now, where higher prices might mean more exclusivity and more sales.
Frankly, I think the movement issue is one discussed by about 2% of the IWC watch buyers, and only a fraction of those people are on this board.
The other 98%, including the dealers, ask if the watch is good looking, a fair value, and semi-exlcusive. Sad to say, but, I don't think most buyers of IWC know of or care about the movement inside.
In fact, most salespeople in dealers do not know or care either. Retailers in general want watches that sell themselves (Rolex Daytona) or watches that they can push, that reward them with a higher-than-normal margin.
So, if I owned IWC, and didn't care about profits or market share, and jsut wanted to produce fine watches, I would make more in-house movements.
HOwever, if I am Richemony, I need a return on my investment, and I want to increase production volume, and increase margins, so, I continue to mass-produce watches with outsourced movements, while simultaneously investing in new, complicated, in-house movements, that move my overall brand upscale, but, which represent a small fraction of my overall sales.
JohnB
1. One problem with the use of insourced movements is that the cost of the basic movement from the original manufacturer is more transparent. We don't know what IWC pays ETA for a 2982, but we can see similar (maybe not identical) movements for sale to get an idea of the basic range.
This, unfortunately, leads to the comment, "You paid that much for a watch with a movement which only cost $xxx?"
2. Explaining the work that IWC does on the movement does not, in my opinion, effectively counter point 1.
3. The problem is economic, rather than technical.
4. The ETA movements used by IWC may be best of breed, but the monopolistic nature of the industry means that the range of competition is small to nonexistent.
5. The experience of Jaeger LeCoultre seems to show that a it is possible for a medium sized company to survive without depending on insourced movements.
6. Finally it comes down to a matter of faith by the corporate management. The prospect of having to discard a complete technology in the event of a major market downturn, as happened in the 1970s, must be daunting. The difference is that now IWC is a core part of a major international conglomerate. Then it was initially a small independent family business and later a disregarded, non core part of an engineering conglomerate.
7. A tentative way forward: IWC should design a new replacement movement for the ETA 2982. To minimise investment the parts should be produced and perhaps assembled by JLC's existing manufacturing base. On proof of the technical and economic concept IWC's own manufacturing capacity should be expanded to include the new movement.
The whole history of watchmaking has been window-dressing to a large extent. Look at the clocks and watches from the 19th and early 20th century. While there were a lot of technical experiments (of which only a few ever made it beyond a few prototypes) most of them used mainly standard technology wilth a more or less elaborate case.
It is still the same today - the technical differences between an ETA movement and the in-house movement of any of the brands is very small. So technically there is no reason to have an in-house movement.
Still, when I eventually buy a new IWC I will not even look at the ETA-based waches. There are several of the current watchws that I really love: The split-minute chronograph, the Fliegers etc. But I will want something that is different from the other brands, and then not only on the outside. So for me the question has only one answer: If the watches are to be interesting in the long run they must have pure IWC movements.
Regards,
Henrik
Last edited: 22 August, 2011 - 14:27
when he says :
"However, if I am Richemony, I need a return on my investment, and I want to increase production volume, and increase margins, so, I continue to mass-produce watches with outsourced movements, while simultaneously investing in new, complicated, in-house movements, that move my overall brand upscale, but, which represent a small fraction of my overall sales"
But why can the outsorced movements can't come from JLC ? They did it in the past, why not now ? That would take away the scepsis ( true or false ) that some customers have for a "budget" caliber , and would make another Richemont company a bit more profitabel by spreading the development cost over a larger amount of movements.
tonny.berteloot@pandora.be
Lets assume that IWC bought out the ebauche manufacturing company supplying IWC with the base movements would we then say that IWC made all its own movements "in house".?
Whilst it would be great for IWC to make this claim the sheer economics of it would certainly drive up the costs to the end user due to high investment in tooling etc which would be necessary.
To me there is nothing wrong in any watch manufacturer outsourcing ( as in most other industries ) as long as they are produced to the very high standards required by IWC ( I think that's the key). Constant evaluation and upgrading through a dedicated movement maker will keep IWC at the cutting edge of the industry. If IWC has te intention of going fully "in House" then its better done gradually over a decde or two.
Ivan Melbourne
Ivan
iwcforme
iwcforme@aol.com
Last edited: 11 December, 2012 - 13:27
I have to say that I’m a big fan of in-house movements, with in-house movements IWC can give their watches their own special IWC heart/characteristic.
I therefore like to see more in-house movements and hope that IWC is going to use less ETA movements ((only using a base-plates and some gears would already be a great improvement -> new Cal.3000 ?)) On the other hand I understand that for economic reasons it’s necessary/preferred to “share” movement parts with other companies.
As already suggested above JLC would in my opinion be a perfect supplier for parts for IWC’s “regular” movement. IWC can then add their own specialities and assemble/finish the movement. Hence I also hope that IWC keep producing the “classic” components like the beautiful Cal. 89 screw-balance and the Pellaton winding mechanism.
I also believe that the movement issue is discussed by the minority of the IWC watch buyers. I’m however confident that it is more than the 2% mentioned by John B and that it thus matters to use in-house movements to enhance IWC’s own identity.
Regards,
Stefan
Last edited: 4 March, 2012 - 12:14