Jason L. from New York City asks:
In the recent years it seems watch brands have been milking the "in-house movement" movement, but how much does it actually cost to develop an in-house movement? How much more does it cost to manufacture that in-house-developed movement in-house?
Since the day of CAD tools and simulations developing a watch movement can be 99% digital with a handful of prototypes (at the final stages of development). It is not like the old days where you needed to have a master watch maker with 50 years of experience to hand draw and fabricate parts for a movement to realize it is flawed and start all over again.
Even worse the milking doesn't stop at the in-house movement claim, because many companies will "allow" the customers to believe because it is a in-house movement that it is also manufactured in house, but many are probably sourced parts from other companies.
This is another one of those watch industry ironies. You are absolutely correct that in most instances when a company brings production in-house it saves costs allowing for a decrease in production costs that should translate into retail price decreases. The opposite seems to happen in the watch industry. At least in the high-end watch industry. There are also a range of nuances of what "in-house" means. Sometimes this term is used when parts are made by sister companies or movements are produced "exclusively" for one brand. It can get dicey.
To a large degree this is another trick to increase the perception of exclusivity and quality. Surely things produced in-house must be better and more beautiful right? Why do I want just another ETA movement? Well ETA makes a lot of movements, but they certainly made a good one. We would say that from a quality perspective ETA is hard to beat. So what you are paying for with an in-house movement is ideally some special features or designs.
However, there is one valid explanation of why in-house movements cost more - at least at first. While the science of building a watch movement has been around for a long time, the art of industrialization is always a challenge. Most brands would much prefer to build a half dozen highly complex tourbillon perpetual calendars than 10,000 simple three-handers. Mass producing watch movements is challenging because parts must be produced with an extremely low level of tolerance and precision. Thus, brands who only in the last few years have decided to go in-house had to buy a lot of new machines, invest in new processes, spend a lot of money learning, hire new people, and sometimes buy or build new facilities. These are all huge expenses that they cannot make up for in volume as most watch companies don't sell in quantities sufficient to recoup a little bit of money in each sale. If you just spend $50 million dollars and you produce less than 10,000 watches a year, you can be damn sure your customers are gonna "feel" the price of those new in-house made movements.
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