Swiss Watchmaking's Crown Jewel
Rolex is a series of paradoxes. They sell obsolete and objectively inferior mechanical devices for 10-1000x the price of their superior digital successors… and demand is stronger than ever in history! Their products are comparable to a Hermès Birkin bag in price, luxury status and waitlist times… yet they produce over 1m units / year (roughly 10x annual Birkin production). They make the most universally recognized and desired Swiss watches… yet their founder wasn’t Swiss and didn’t start the company in Switzerland! If Rolex were publicly traded, they’d almost certainly be among the top 50 market cap companies in the world… yet they’re 100% owned by a charitable foundation in Geneva that (among other things) literally just gives away money to local people in the city.
Tune in for one of the most fascinating and admirable companies we’ve ever covered on Acquired. We had an absolute blast making the episode, and hope you enjoy it as much as we did!
More on the episode
corrections
- We said that James Bond only wore Rolex watches until Omega in 1995. He actually wore several watch brands in the early days, including Seiko, Hamilton, Breitling, and Gruen.
- While Tudor did buy movements from ETA, in the early days, they are now considered to make their own movements starting in 2015. Technically, they are made by a new company called Kenissi also manufactures them for companies like Chanel and Breitling in addition to Tudor. The Hans Wilsdorf Foundation is a large owner of Kenissi. These movements are widely held to be very high-quality with similar performance characteristics to other Rolex movements.
- We said Tudor makes <1% of Rolex’s production. This is likely incorrect, as other sources estimate the number is closer to 20% of Rolex’s production. Tudor sells a lot more Black Bay 58s than we realized!
- We referred to James Bond’s father as British. More specifically, he was Scottish :)
- We talked about the idea of a luxury smart watch. There actually is a company called Ganance that retrofits mechanical watches to make them smart with a device!
- We said Bienne is in the Swiss mountains. It is not. It's next to a lake in a valley (and there are some medium hills not far from it; but definitely not mountains).
- There were other names that Hans Wilsdorf tried before Rolex! They included Hofex, Falcon, Genex, Lonex, Lexis and Wintex. Some of these names even ended up on watches. (Thank you to Andrew Morgan)
- We received more information on Rolex’s affiliation with the Everest expedition. Smiths was the official outfitter of the expedition, and Rolex merely sent a watch (or watches) along with the climbers. Rolex however beat Smiths to the punch in marketing it. Hans apparently had a member of the team pass down a coded message as soon as the leading party reached the top, so they could react immediately and have a full page advertisement in the newspaper the very next day, before Smiths. Rolex claimed the watch was worn at the summit. It wasn’t! Smiths lodged a complaint, and Rolex published a written apology. But it was too late, and the public already associated Rolex with the expedition. In fact, if you look at the material Rolex has on its website today, it heavily implies through imagery and language that it was a Rolex worn at the summit, but never actively says it. (Thank you to Andrew Morgan)
- We implied that Rolex didn’t move into being a luxury brand until the quartz crisis. Rolex was in fact, already taking steps in this direction. Andre Heineger is quoted saying that Rolex was “in the luxury business” rather than the “watch business”. Additionally, Rolex launched the Cellini (a dress-only watch) in the mid-1960s, offered only in gold. Additionally, in 1969, the very same year as the Seiko Astron (so really, before the Quartz Crisis), Rolex released the first solid gold Submariner, a clear signal they were open to making more than just purely functional timepieces. (Thank you to Andrew Morgan)