Ask most people around the world to name the
finest brand of wristwatch in the world and the answer will usually be Rolex. A status symbol, Rolex is one of the world’s
most loved luxury brands. Worn by everyone from Winston Churchill to
James Bond, this brand is one of the most recognizable and sought after brands worldwide. The most expensive Rolex sold at auction fetched
over $17 million. But why are they so expensive? Is it purely clever branding or are there
valuable parts inside these iconic watches of incredible worth? Or is the value of these watches owed to the
rich and historic journey of the brand? In today’s episode of the Infographics Show
we will look at the history of the company and figure out –Why is Rolex so Expensive? So first of all – just how much does a Rolex
cost? Prices for a mechanical Rolex watch start
at around 3,250 pounds for the Oyster ladies watch, and the James Bond Submariner will
cost you as much as 5,000 pounds. A cult Daytona costs around 8,250 pounds. Moving up the range, a platinum ice-blue diamond
Daytona costs over 50,000 pounds. In 1955, the GMT-Master was born. This timepiece was designed for Pan AM pilots,
allowing them to see the time and day in different parts of the world. This model with a rotating dial retails at
5,600 pounds. Thus, while being expensive, Rolex offers
a wide range of models that most people could afford if they were to save up or land a high-paying
job. Despite their high cost, Rolex watches are
obtainable to most consumers, and once you own one you might feel like you have arrived. Rolex began when Hans Wilsdorf founded a watch
distribution company in London. At the time wrist watches were imprecise,
but Wilsdorf had a dream of making a watch that was not only precise but also elegant. He used small movements manufactured by a
watchmaking firm based in Bienne, Switzerland. He came up with the name Rolex as it was short
(thus able to fit on the timepiece) and was easy to pronounce in any language. The firm concentrated on the quality of the
movements, and its quest for chronometric precision eventually led to a successful product. In 1910, a Rolex wristwatch was the first
of its kind to receive the Swiss Certificate of Precision by the official watch rating
center in Bienne. In 1914, Kew Observatory in Great Britain
awarded Rolex with a class A certificate. At that time such a certification had only
been awarded for marine chronometers. From this point onwards, Rolex was a brand
name associated with quality products. In 1919, Rolex shifted its headquarters to
Geneva. By 1926, Rolex had launched the Oyster. This was the first waterproof wristwatch with
a sealed case to protect the inner movements. The next year an English swimmer named Mercedes
Gleitze wore the Oyster watch while swimming across the English Channel. The watched survived the 10 hour journey and
remained in good working order on the other side. This is an example of the company’s excellent
early branding and marketing strategies. In 1933, a team of explorers flew over Everest
all wearing Rolexes. In September of 1935, Sir Malcolm Campbell
set a land speed record of over 300 miles an hour. And what was he wearing on his wrist? Yes, a Rolex. Sir Edmund Hillary climbed Everest wearing
a Rolex. By this time, Rolex was well established as
the wristwatch worn by high achievers. This is the watch for winners, record-breakers,
and adventurers. In the year 2000, the 4130 chronograph movement
was developed and put together by Rolex. It was an admirable simplistic chronograph
made of just 290 components, which is far less than standard chronograph movement. Rolex continues to lead the wristwatch market
today. Each watch that leaves the factory in Bienne
is tested to a high standard. They are also tested by the independent Swiss
Chronometer Testing Institute. Each watch earns the title of Superlative
Chronometer. Each Rolex is accurate to -2/+2 seconds a
day, surpassing the stringent standards of -4/+6 seconds per day. The inner movements of the watch are costly
to develop and take both time and money to perfect to the desired level. Watch movements are expensive to make. The parts are small and have a high failure
rate during the manufacturing process. These parts need to be put together by hand,
and the Swiss have one of the highest labor costs in the world. Also the materials are expensive to acquire. Rolex uses 904L steel instead of the standard
luxury market 316L steel, and this adds to the manufacturing cost. This metal is harder and shinier but also
more expensive and more difficult to work with. Rolex had to replace most of its production
machines and tools when it made the switch to 904L steel. The quality of workmanship is normally higher
than say an Omega or Tag Heuer. Rolex is unable to price its watches at the
same level of other brands. Rolex makes between 800,000 to a million watches
each year, and it does everything itself, including the melting of its gold and steel. It could be said that Rolex watches are reasonably
priced because their retail prices are close to their resale values. If you were to buy a new Rolex watch and wear
it for a year or so and then sell it to a new buyer, you wouldn’t lose much money
with the transaction. Some popular models after a period of 10-20
years might actually rise in value from their original retail price. This appreciation in value is rare with watches
but is in line with Rolex’s intelligent marketing and brand value. Despite the high price tag of a Rolex wristwatch,
you will find it difficult to find another product with the same level of quality. Over time, Rolex has built a reputation based
on the length of time and quality of workmanship that goes into its watches. Mechanical watches not only cost a lot to
manufacture but they are also expensive to design. The movements must be designed and developed
for each new timepiece. Rolex spends time developing products that
will keep ahead of the industry curve. Rolexes are more than just practical objects
to tell the time with. They are a fusion of engineering and watchmaking
art, and their rich heritage adds to the brand value. They are highly desirable among collectors. The stainless steel Rolex Daytona that once
belonged to actor Paul Newman holds the title of being the most expensive watch ever sold
at auction. The Phillips auction house in New York sold
the timepiece for $17.8 million beating a prior record of $5 million for a Bao Dai Rolex. So when we consider the cost of the Rolex,
we must consider the development, workmanship, and materials cost of the watches as well
as the brand value that has been established over the years by the achievements of Rolex
customers. Do you think a Rolex wristwatch is worth the
price on the box? Is there a better watch out there on the market? Let us know below in the comments section. Also, be sure to watch our other show called
– Most Expensive Machines in the World - Thanks for watching, and as always, don't forget
to like, share and subscribe, and see you all again next time at the Infographics Show.
