There has been a lot of discussion recently about the Hodinkee “interview” with Thierry Stern where the demand for steel watches, and in particular steel Nautilus/Aquanaut was a focus. My previous blog took a stab at addressing the issue.
To summarise, Thierry Stern argued that Patek Philippe would not go down the line of ramping up production of steel Nautilus/Aquanaut in order to meet the huge increase in demand. Production would rise, but only within strict prior planning.
Production of steel watches will rise….. but only very gradually
As a problem, this is a good problem to have. Yet, having said that, if one looks at Audemars Piguet, one can see that when a particular style of watch becomes too dominating within a brand, then it can cause very significant problems for the brand. Is it Audemars Piguet or is it the Royal Oak company? Thierry Stern does not want to see Patek Philippe become the Nautilus Company. Indeed, given that Patek Philippe has earned its horological reputation through the innovation of complicated watches, the need to steer demand away from the Nautilus into other areas of the range must surely be seen as a priority.
In my previous article, I set out three ideas that might be used to address the Nautilus “problem”.
- Restrict production of a select group of other watches within the range in order to create super-hot and impossible-to-get watches that were neither Nautilus nor Aquanaut.
- Limit the level of complications that were used in Aquanaut/Nautilus.
- Be more ruthless in removing watches from production – seeing unsold (undesirable?) watches for months sitting in the windows of ADs sends a poor message.
Some very good counterpoints were made to my article and I think it is worth addressing these counterpoints. Specifically, a number of issues arose regarding the first point.
A problem of excess demand?
From an economics standpoint, there is excess demand for Aquanaut and Nautilus. Thierry Stern has said that he will not meet this excess demand by raising supply. What needs to happen is that this excess demand needs to be displaced into other areas of the Patek Philippe range. One blog reader argued that a natural result of the situation is that demand will be displaced into other brands that can meet the demand. Royal Oak, for example!! This is obviously not what Patek Philippe want to see. Yet, collectors want steel sports watches that are hot.
Other readers argued that demand will eventually be met but only over a much longer period of time. Hence, prices for steel Patek Philippe watches will remain very elevated indefinitely.
In an ideal world, this excess demand would find a place in other Patek Philippe watches. Yet, as one seasoned collector reasoned, watches like the Ref. 5231 were already extremely hard to buy. Restricting supply of, say the Ref 5231 or other watches like this does not persuade potential buyers that there are other “hot” watches to buy other than Aquanaut or Nautilus.
Similarly, watches like the Ref. 5212, whilst hot, just do not appeal to the “steel sports” fan in the same way. There is a “youth” element at play. It was argued that making some of the Calatrava range more youthful might be a solution. I think all these points are very fair. Yet, displacing demand into other areas of the Patek Philippe range isn’t straightforward. Would the type of new buyer who wants a steel Aquanaut be happy with a more youthful-looking Calatrava? It is not a certainty by any means.
Watches like the steel Ref. 5212 are already hot. Can they be an alternative to the Nautilus?
A more radical solution
So, maybe the answer for Patek Philippe is more radical. Maybe there needs to be a new line within their range. A new and true sports model. There is no question that, over the last decade, Patek Philippe have re-branded themselves to cater for a more youthful market. Aquanauts with colourful rubber straps. Pilot watches. Alarm functions. The breadth and diversity of the range has increased significantly. And there is no question that watches have been designed with a very careful view on attracting a more youthful clientele. That isn’t to say that the traditional core of the brand has been ignored. Rather, a new angle to the brand has been developed. Maybe there needs to be another string to this particular bow. Maybe a new design with a full-lead sports watch makes a lot of sense.
A full-lead sports watch?
There are a group of collectors who adhere to the view that the Nautilus and Aquanaut are not sports watches in the true sense of the word. Sporty wathces but not full sports watches. When it comes to sports watches, it is nearly always the Rolex Submariner or GMT that come to mind. Superbly engineered. Extremely robust. Reliable. Iconic. Waterproof to a level that will withstand most amateur diving. And at under $10k quite the bargain.
It is, for many, the ultimate sports watch. Rolex can spread their demand across a number of “hot watches” because demand is focused in the sports watch arena and Rolex makes plenty of different types of sports watches. Patek Philippe only has the Aquanaut and the Nautilus in this particular “sporty” field, so how can it divert demand into other areas of the range?
Many manufacturers have tried to emulate the success of the Rolex sports watch. None have succeeded. It is, perhaps, for good reason that Patek Philippe have not ventured to compete directly with Rolex in the realm of sports watches. However, maybe there is now an argument to suggest that it is time to do so? Or at least tread on some toes?
Should Patek Philippe develop a pure sports watch? Would it have to be steel? Would it need to have a rotating bezel? What about the need to be priced to compete directly with Rolex. Would it need to have very few complications? These are questions that go beyond the scope of this article. It is just an idea….loads of holes. Loads of problems. Just an idea.
What I will say is that within the entire history of Patek Philippe, there has never been a pure hardcore sports watch. If Patek Philippe went down this path, it would no doubt be a sports watch with tremendous appeal.
To read the first part of this series, click below…..