Saturday, November 03, 2012

Of Rolex

I supposed a full analysis of Swatch and the Swiss watch industry would never be complete without talking about the two most prestigious brands: Rolex and Patek Philippe. Hence this post and the next are here to fill the gap. Interested readers can start from the first post on Swatch.

Rolex is undoubtedly the most renowned brand in world of watches. In fact it's so popular that most youngsters today would eschew Rolex, believing that it's over exposed, too loud or simply too common. Some would even think that it has degraded to an "Uncle Brand". Only uncles who want to show off would buy that gold Rolex watch that is easily recognizable and the perfect way to brag about the wealth that they actually do not possess.
The Rolex logo and the model Uncles like

I read at another blog where an avid watch lover blogger aptly wrote that when people see his Rolex, there would be almost as many who would go, "Eeee, another Rolex, this guy is all about showing off." versus "Wow, cool, it's a Rolex GMT Master II!".

To understand the story of Rolex, we need to study its history (trust me, it's fascinating) and its founder. Btw, the Rolex wiki also has a good short writeup for those who want the full story.

It is worth noting that major Rolex innovations and events stopped some 50 years ago but what has transpired before that is so profound that it lasted half a century and hence till this day, Rolex is still the No.1 watch brand selling almost a million pieces per year (to be exact, experts estimate 800,000) and Rolex has a revenue of USD 6 billion, an almost 20% market share in the luxury watch market. On average, each Rolex sells for USD 7,000+.

Rolex today remains unlisted and is owned by a foundation with part of its profits going to charity. Its financials are not public and much of what the company does remains illusive to analysis. What we do know is its illustrious history.

Rolex SA was founded by Hans Wilsdorf in 1905, with a dream to make the best reliable watches for people and for those in important and noble but sometimes dangerous professions. As a result of his passion, ingenuity and a lot of business mind, Rolex has a good list of world's firsts, including the world's first waterproof watch, first automatically changing date (apparently in the past, you have to change the date yourself, every day!), first watch to show 2 time zone (GMT) and first to show both day and date. All movements were practical and yet with displays of ingenuity. Needless to say though, they were also made in-house, a trait that serious watchmakers took serious pride in having. Sadly, its innovations ended when Hans died in 1960.

But what's more fascinating about Rolex is its participation in significant events of human triumph. Such as being the watch that was wore on the first conquest of Mt Everest or the watch that went to the deepest dive in Mariana Trench some 10,000 metres deep. Still working, of course at the extremes of our beloved planet. (Well... Omega went to the moon, hence this blogger recommends Swatch which owns Omega :) It was also the preferred watch for soldiers and pilots during the WWII which were, unfortunately, confiscated by the Nazis.

Its enduring effort to help others with innovation and pure simple generosity is another hallmark of its legacy. For the POWs who lost their watches to the Nazis, Hans made sure that the soldiers received a free watch as long as they wrote a letter to Rolex. Then in the 1950s, when pilots needed to fly transcontinental, Rolex developed the GMT watch for PanAm so as to help the pilots and crew cope with jet lag and communications back home.

For workers working in environments that caused interference with mechanical watches (engineers in power plants, doctors using MRI etc), Rolex developed the Milgauss that is anti-magnetic. As for sea-farers, mountain climbers, racers, trekkers and explorers, Rolex have dedicated models to them and some of these are also the best selling and are the best retainers of value.

The Rolex Milgauss

It is hard for us to fathom today, but during those times some 50 years ago, an accurate watch was very important not just for professionals but also for normal folks. There were stories of train crashes because the operator's watch wasn't working well. Hans understood this need for accurate timekeeping for everyone, especially for some who cannot afford Rolex. So he created a second line called Tudor, which uses ETA/Swatch movements so that others can afford them. Today Tudor is seen as 2nd class and hence almost fading into oblivion, but I see the decision back then as a noble one of empowering the working class. One that is close to the heart of Hans and Rolex's legacy.

With all these strong powerful emotive stories behind Rolex, is it a wonder it grew to become the most well-loved watch brand globally? Of course, most aunties and uncles probably don't know the stories of trials and tribulations behind the Rolex brand. They just buy to show off, or they buy it as a store of value, knowing that it will be worth at least 70-80% of their purchase price should they need to pawn it some day. Actually most Rolex watches if held long enough (like more than 10 years) sells for more than its purchase price.

For aspiring watch lovers who bothered and researched about the world of watchmaking, they would usually go full circle with this love-hate Rolex relationship, just like many others before them. We hate it for its conspicuous ubiquitousity but grow to love it for what it stands for and what it is worth.

That's the story of Rolex.

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