The Speedmaster Standard

On May 25th 2013, Ablogtowatch.com published  an article titled Timezone.com Founder Worries About The Fragility Of High Watch Prices by Richard Paige.

The author, a veteran of the watch industry, questions the steep rise in Swiss watch prices over the last few decades. Richard Paige cites an evolutionary hypothesis called the Red Queen Effect, based on which a system needs to keep adapting and evolving in order to survive in an ever-changing environment. According to the founder of Timezone.com, the technological advancements brought to watchmaking in the last decades should have translated into lower prices for the exact same product.

Richard Paige draws a parallel with the consumer electronics industry, where products of Apple Inc. keeps innovating one product generation after another by offering more performance… without substantially raising the price. The exact opposite seems to happen in the watch industry, observes Timezone’s founder, where the cost of an Omega Speedmaster rose from USD 225 in 1973 to USD 4500 in 2013.

I do personally share Mr. Paige’s feeling. In 1995 I was considering purchasing my first “expensive” Swiss watch, an Omega Speedmaster, and I can clearly remember the retail price being slightly over CHF 600 at the time. In defense of Omega, user Azua commented Richard Paige’s article:

Your math is flawed. Omega is a Swiss watch to the price increase over time should be compared to the rate of inflation in Switzerland. Also regulation and labor laws have changed drastically since the 1970’s…Especially in the European Union which all adds to the costs

But is Mister Paige’s math really flawed? Are there so many variables that it is impossible to account for the price increase over a time span of more than 40 years? Let’s try to see step by step what we know for a fact and what is left to guessing… click on the link for the full article:

WatchProjects.com – The Speedmaster Standard