I did not know this. Many of you probably did.

http://www.businessinsider.com/why-luxury-watches-cost-so-much-money-2016-4

 

Not sure the headline and the article are a match. The article doesn't directly answer the question of why luxury watches cost so much but deals more with the after-effects of the Swiss watch/quartz crisis of the 1970s (which is a more interesting topic to me anyway!).

I recently read a good book on the history of the Swiss watch industry by Pierre-Yves Donze that talks about how a host of factors (including but not solely quartz technology from Japan) upended the Swiss mechanical industry in the 70s. A very well researched and easy to follow read, highly recommended.

 

Well, it indirectly answers it I guess...

Before quartz, accuracy was often a function of the price you paid for a watch of a given style and material. Quartz changed that equation, shifted the paradigm, and the result was a nearly decimated Swiss watch industry. I remember this being used as an example of a paradigm shift in a film I once saw at my former engineering job in the late 80's - Joel Barker film from memory.

To keep from dying out like hundreds of small and even some larger brands did, they changed the way people looked at their products through marketing, at least some did. So rather than just being another reasonably accurate tool watch, a Rolex now became a status symbol. Omega chose to cut costs, leading to their "dark period" as people sometimes refer to those years here...

Since accuracy was no not a defining advantage, something else had to be, and that something also made the watches very expensive relative to where they were before in the market.

I'm sure there are plenty of other factors, but I think that is the gist of the article in question anyway...

Cheers, Al