Morgan Stanley Watch Brand Report

[macrowatch]

I'm sure many of you have seen the report circulating around. I find these high level take aways interesting:

1. By Revenue volume AP has climbed from 7th to 4th. (Beating out Patek now!!!).
2. However, dig a little deeper, you see that this revenue jump is more due to AP moving into retail and doing less wholesale in 2021. One can see this also pushing up the average unit sales price because it is now more retail rather than whole sale price points per unit sold.
3. Non AP related, Rolex obviously remains king, but 'diet Rolex' aka Tudor now makes up 6% of sales.


Looks like the CEO has done GOOD! And interesting to see the report card of the strategy after 9 years.

[Captainbob]

AP putting a lot of eggs in one basket with its sales model and reliance on Royal Oak. Could get ugly if tastes change and they have expensive boutiques and reduced demand.

[DonLee]

TBH it's so close, hard to say did AP actually surpass PP. However, this year with the new models and increased production numbers, guaranteed AP will have a higher revenue this year. PP is also shooting itself in the foot by hyping up the Nautilus, but then not having it available. But who knows what will happen on the future models.

[dauster]

Originally Posted by DonLee

TBH it's so close, hard to say did AP actually surpass PP. However, this year with the new models and increased production numbers, guaranteed AP will have a higher revenue this year. PP is also shooting itself in the foot by hyping up the Nautilus, but then not having it available. But who knows what will happen on the future models.

agree on everything but don't think PP shoot itself in the foot, nautilus was flying off the shelves anyway - it maybe has raised the tiffany profile even more. the question is should they have let another model shine instead of the already hyped nautilus

[macrowatch]

Originally Posted by DonLee

TBH it's so close, hard to say did AP actually surpass PP. However, this year with the new models and increased production numbers, guaranteed AP will have a higher revenue this year. PP is also shooting itself in the foot by hyping up the Nautilus, but then not having it available. But who knows what will happen on the future models.

No doubt, though I do think the sharp number crunchers at Morgan Stanley got it right though. But hey, can't buy stock or watches in AP, so only a spectators opinion here. On a side glance, seems interesting to be able to buy the dip in watches of Switzerland as the only indirect investment into the juggernauts of Patek, Rolex, AP.

Originally Posted by Captainbob

AP putting a lot of eggs in one basket with its sales model and reliance on Royal Oak. Could get ugly if tastes change and they have expensive boutiques and reduced demand.

Good thing about CEO is can always leave on top and let that be the next CEO's problem! Although I have to imagine the rent per se is not onerous relative to the size of the company now, especially with how few doors there actually are, and most are JV anyways.

Further, insofar as the Rolex Submariner seems to be chugging along just fine, even if AP were a mono-product company I think it would still be fine. I think the standout is how well the brand management has been now after a decade.

[DonLee]

Originally Posted by dauster

agree on everything but don't think PP shoot itself in the foot, nautilus was flying off the shelves anyway - it maybe has raised the tiffany profile even more. the question is should they have let another model shine instead of the already hyped nautilus

like you said, they didn't need to hype the Nautilus anymore cuz they were selling every single one they made. They don't make money from grey market sales. All the hype just goes to profits for PP owners and flippers.

And yeah, had they made a dress watch with the tiffany dial, they'd instantly open up another popular line.

[TunaTuna]

Originally Posted by Captainbob

AP putting a lot of eggs in one basket with its sales model and reliance on Royal Oak. Could get ugly if tastes change and they have expensive boutiques and reduced demand.

Hmmm after 50 years it tastes better than ever

[Overwatch]

Originally Posted by Captainbob

AP putting a lot of eggs in one basket with its sales model and reliance on Royal Oak. Could get ugly if tastes change and they have expensive boutiques and reduced demand.

Sorry, don’t agree with you here at all. AP is going to do just fine and better than ever.

[Amateur]

As a one watch company, they certainly are doing great!

[Watchandhoop]

Originally Posted by Captainbob

AP putting a lot of eggs in one basket with its sales model and reliance on Royal Oak. Could get ugly if tastes change and they have expensive boutiques and reduced demand.

This is probably the worst take I’ve seen on here. You can literally say the same about every watch brand out there. And I believe AP has the most diverse options out of all of the brands.

[HMHM]

Originally Posted by Watchandhoop

This is probably the worst take I’ve seen on here. You can literally say the same about every watch brand out there. And I believe AP has the most diverse options out of all of the brands.

I believe Rolex have the most diverse of options?

[EEpro]

Originally Posted by HMHM

I believe Rolex have the most diverse of options?

Not only that but every last one of them is an icon trading at a premium in every color way. Truly astounding.

AP is a one trick pony for sure. If they spun off Royal Oak as a separate brand who would be waiting in line at AP for circle watch on a strap?

[Watchandhoop]

Originally Posted by EEpro

Not only that but every last one of them is an icon trading at a premium in every color way. Truly astounding.

AP is a one trick pony for sure. If they spun off Royal Oak as a separate brand who would be waiting in line at AP for circle watch on a strap?

There are so many variations of the Royal oak in the line up. I think it’s more exciting and interesting. It’s obviously personal preference. I think Rolex has gotten boring and old looking at the same couple watches with the same variations. There are about 20 different APs I would buy right now. Rolex maybe 3 I want? Again it’s personal preference though.

[VogelPhoenix]

Originally Posted by HMHM

I believe Rolex have the most diverse of options?

I can't tell if this is serious or sarcasm?

An odd contest in any case, as for example Omega, which certainly has more "options" than Rolex, shows that maximizing the range of offerings is no virtue in itself. There are many other brands that have a more diverse range of complications or materials than Rolex, to little effect.

[HMHM]

Originally Posted by VogelPhoenix

I can't tell if this is serious or sarcasm?

An odd contest in any case, as for example Omega, which certainly has more "options" than Rolex, shows that maximizing the range of offerings is no virtue in itself. There are many other brands that have a more diverse range of complications or materials than Rolex, to little effect.

I’m serious though. I believe that Rolex have the most SIGNIFICANTLY diverse line-up of watches in their armour. Traditionally, Rolex and Omega have been rivals since the 50s and 60s. Hence if you say that Omega have an equal, if not more diverse range than Rolex, I would be inclined to agree. Market competitors often have similar products to meet the demands of the public.

Where Rolex and Omega differ is that one has a clear direction with their product line-up, and the other is just throwing something at the wall to see which sticks. Just for example, Rolex have a very clear chronograph in their collection - the Daytona, made in different materials. Omega have so many different ranges of Speedmaster that I’m starting to get confuse. We have the 3861 professional, the 321 EW, snoopy 50th, FOIS, Chronoscope, 57 etc. So yes it is diverse, but is it significant? I don’t think so as it’s merely a variant of one model which is the Speedmaster. Under the Omega brand, essentially their two main products are the Speedmaster and the Seamaster. The constellation and De Ville are really poor sellers. On the Rolex side, they have a clear category for each product line - submariner (dive watch), GMT (dual-time zone), Daytona (chronograph), Day Date/Datejust (dress watch), Cellini (leather strap dress watch), explorers, OPs and YMs as well. Obviously there are overlaps such as the SkyD and the GMT, but they are two distinct watches with different movements.

Where AP is at right now is that it makes a really good watch which is the Royal Oak. I believe that the 15407ST is better than any Nautilus, even the 5740. But if we take away the RO, what’s left of AP? I will extend an olive branch and say that the Offshore is a good line-up, particularly the diver, yet I doubt the sales of the offshore alone is enough to carry AP.

[DonLee]

Originally Posted by HMHM

I believe Rolex have the most diverse of options?

pretty much ALL sports watches.

What Rolex has is not the most diverse options... it has the most OPTIONS of model lines that are popular. With almost everyone selling out completely despite they already produce in high volumes.

[macrowatch]

Originally Posted by Amateur

As a one watch company, they certainly are doing great!

Apple is also crushing it as a one watch company!!!

Originally Posted by HMHM

I’m serious though. I believe that Rolex have the most SIGNIFICANTLY diverse line-up of watches in their armour. Traditionally, Rolex and Omega have been rivals since the 50s and 60s. Hence if you say that Omega have an equal, if not more diverse range than Rolex, I would be inclined to agree. Market competitors often have similar products to meet the demands of the public.

Where Rolex and Omega differ is that one has a clear direction with their product line-up, and the other is just throwing something at the wall to see which sticks. Just for example, Rolex have a very clear chronograph in their collection - the Daytona, made in different materials. Omega have so many different ranges of Speedmaster that I’m starting to get confuse. We have the 3861 professional, the 321 EW, snoopy 50th, FOIS, Chronoscope, 57 etc. So yes it is diverse, but is it significant? I don’t think so as it’s merely a variant of one model which is the Speedmaster. Under the Omega brand, essentially their two main products are the Speedmaster and the Seamaster. The constellation and De Ville are really poor sellers. On the Rolex side, they have a clear category for each product line - submariner (dive watch), GMT (dual-time zone), Daytona (chronograph), Day Date/Datejust (dress watch), Cellini (leather strap dress watch), explorers, OPs and YMs as well. Obviously there are overlaps such as the SkyD and the GMT, but they are two distinct watches with different movements.

Where AP is at right now is that it makes a really good watch which is the Royal Oak. I believe that the 15407ST is better than any Nautilus, even the 5740. But if we take away the RO, what’s left of AP? I will extend an olive branch and say that the Offshore is a good line-up, particularly the diver, yet I doubt the sales of the offshore alone is enough to carry AP.

I think this is a good take and clarification. And I think actually the lack of diversity within the Daytona line is probably what gives it strength versus the speed-master line. Different colors, but essentially all same design language.

Separately, I find it interesting that the huge ramp up in marketing and advertising spending for Cartier is paying off.

Omega needs a new CEO.

[VogelPhoenix]

Originally Posted by HMHM

I’m serious though. I believe that Rolex have the most SIGNIFICANTLY diverse line-up of watches in their armour. Traditionally, Rolex and Omega have been rivals since the 50s and 60s. Hence if you say that Omega have an equal, if not more diverse range than Rolex, I would be inclined to agree. Market competitors often have similar products to meet the demands of the public.

Where Rolex and Omega differ is that one has a clear direction with their product line-up, and the other is just throwing something at the wall to see which sticks. Just for example, Rolex have a very clear chronograph in their collection - the Daytona, made in different materials. Omega have so many different ranges of Speedmaster that I’m starting to get confuse. We have the 3861 professional, the 321 EW, snoopy 50th, FOIS, Chronoscope, 57 etc. So yes it is diverse, but is it significant? I don’t think so as it’s merely a variant of one model which is the Speedmaster. Under the Omega brand, essentially their two main products are the Speedmaster and the Seamaster. The constellation and De Ville are really poor sellers. On the Rolex side, they have a clear category for each product line - submariner (dive watch), GMT (dual-time zone), Daytona (chronograph), Day Date/Datejust (dress watch), Cellini (leather strap dress watch), explorers, OPs and YMs as well. Obviously there are overlaps such as the SkyD and the GMT, but they are two distinct watches with different movements.

Where AP is at right now is that it makes a really good watch which is the Royal Oak. I believe that the 15407ST is better than any Nautilus, even the 5740. But if we take away the RO, what’s left of AP? I will extend an olive branch and say that the Offshore is a good line-up, particularly the diver, yet I doubt the sales of the offshore alone is enough to carry AP.

I think the AP w/o the RO would be comparable to Rolex without their "Professional" watches. But I agree wrt to Omega. A quick count shows 140+ Speedmaster variations. I gave up when the Seamaster count reached 500 (!). It would require a radical change in direction to streamline that.

[Longhorn]

Originally Posted by VogelPhoenix

I think the AP w/o the RO would be comparable to Rolex without their "Professional" watches. But I agree wrt to Omega. A quick count shows 140+ Speedmaster variations. I gave up when the Seamaster count reached 500 (!). It would require a radical change in direction to streamline that.

Do you have a count of how many datejust variants are available currently?

[911AP]

I think people are getting lost here. AP has only 2 watches people really buy. The RO and the ROO. We could even throw in the concept line as well here. But with Rolex people buy the GMT, submariner, Daytona, day date, date just, oyster perpetual...etc.....

So while AP has the majority of their sales going to 2 watch models, and their many variations. Rolex has more than 2 models getting lots of love. All of the models I listed are practically impossible to get in any configuration. This for a company that produces 1m watches per year vs the 40-50k AP is producing.

Even patek has more variation than AP that people like. It's not just the nautilus and the aquanaut. People buy the grand complication watches as well.

[whiterabbit66]

Originally Posted by 911AP

I think people are getting lost here. AP has only 2 watches people really buy. The RO and the ROO. We could even throw in the concept line as well here. But with Rolex people buy the GMT, submariner, Daytona, day date, date just, oyster perpetual...etc.....

So while AP has the majority of their sales going to 2 watch models, and their many variations. Rolex has more than 2 models getting lots of love. All of the models I listed are practically impossible to get in any configuration. This for a company that produces 1m watches per year vs the 40-50k AP is producing.

Even patek has more variation than AP that people like. It's not just the nautilus and the aquanaut. People buy the grand complication watches as well.

Day date, date just, oyster perpetual, millgaus etc to me all look the same and are one model. Rolex does not have a really broad range and thats why they are so recognizable.

[macrowatch]

Originally Posted by Longhorn

Do you have a count of how many datejust variants are available currently?

I think he means you have different cases, bracelets, hands, dial configurations on speed master. As opposed to DJ is really same case, same hands, etc.

[southparkclyde]

Originally Posted by whiterabbit66

Day date, date just, oyster perpetual, millgaus etc to me all look the same and are one model. Rolex does not have a really broad range and thats why they are so recognizable.

To each their own but if you think the Milgauss looks the same as the Day-Date, then I'd say you're oversimplifying. These are very much different models, made for different purposes, for different audiences.

I agree with 911AP regarding general demand for AP models vs Rolex models.

[dauster]

Originally Posted by Watchandhoop

This is probably the worst take I’ve seen on here. You can literally say the same about every watch brand out there. And I believe AP has the most diverse options out of all of the brands.

think of patek and vacheron for example - they have plenty of variety. I like ap a lot but I dont have to be delusional about their limited variety

[Watchandhoop]

Originally Posted by dauster

think of patek and vacheron for example - they have plenty of variety. I like ap a lot but I dont have to be delusional about their limited variety

The Royal Oak line itself has quite the variety. More of a variety than Patek and Vacheron. The Royal oak has a wide variety of materials, colors, and dials vs the nautilus and the overseas.

[DonLee]

Originally Posted by Watchandhoop

The Royal Oak line itself has quite the variety. More of a variety than Patek and Vacheron. The Royal oak has a wide variety of materials, colors, and dials vs the nautilus and the overseas.

As for the RO, just because you show every possible combo of dial color, size, and material, doesn't make the whole brand diverse.

Lets take 2 watches from Rolex, the day-date and datejust. That would be like saying the Rolex Day-date and Date-just have 6+ possible dial colors in 3-4 different materials with 3 different bezels in multiple number of sizes, compared to the Nautilus and Overseas, and make a conclusion without bothering to look at all the other sought after dress watches all with different movements and complications, Rolex is more diverse than PP and VC.



What about dress watches? Annual calendars, manual chronographs, worldtimers, chrono perpetual calendars, split chronos, enamel dials, pilot watch...

AP have a lot of variety of combinations, but they are just that... combinations.

[VogelPhoenix]

Originally Posted by Longhorn

Do you have a count of how many datejust variants are available currently?

Good point - counting all the permutations of sizes, dials, bezel, bracelet for the Datejust will probably also yield 100's of variants. Yet Rolex is clever enough to present this as options for a single model, while the Speedmaster and Seamaster lines are indeed collections of fundamentally different watches, with each variant then coming in a multitude of variations. Overall this conveys a feeling of arbitrariness and ubiquity, which is the opposite of what they should do, IMO.

[Jsol]

Why is dependency on the RO bad? Five decades later it's one of the hottest watches in the world. It's like a Porsche 911. Will always be the face and money maker and it sure as hell works.


Sent from my iPhone using Tapatalk

[DonLee]

Originally Posted by Jsol

Why is dependency on the RO bad? Five decades later it's one of the hottest watches in the world. It's like a Porsche 911. Will always be the face and money maker and it sure as hell works.


Sent from my iPhone using Tapatalk

It isn't at all imo. AP basically saved the luxury watch industry with this watch. It will always be the OG imo for luxury sports watch.

[subtona]

Originally Posted by Watchandhoop

This is probably the worst take I’ve seen on here. You can literally say the same about every watch brand out there. And I believe AP has the most diverse options out of all of the brands.

Originally Posted by HMHM

I believe Rolex have the most diverse of options?

Pateks line up has to be considered for its diversity.

Look at their catalogue, just the variety of case shapes puts the rest to shame.

Then add the dials, indices, hands, complications etc.

Ps what I really found interesting and unexplainable is Cartier moving ahead of omega.

Tudor is also inspiring for creating quality desirable watches at a relative discount.