[Video] Speedy Tuesday Event Report — Biel Edition 2022

Evitzee · May 4, 2022

I'm just guessing here but I think they could easily sell 100-200 each of the Pt and Au versions a year, so maybe 400 a year. That's 20% of a 2,000 annual production. So maybe 1,500 or so of the 'economy' steel models, not many for worldwide sale. The precious metal 321s are 4 to 6 times more expensive at retail, even greater at wholesale, so the tendency would be to make as many Pt and Au ones as the market could absorb. The 321 steel version will always be hard to get, that's by design. In any scenario there just won't be many 321s produced.

dsio · May 4, 2022

Evitzee
I'm just guessing here but I think they could easily sell 100-200 each of the Pt and Au versions a year, so maybe 400 a year. That's 20% of a 2,000 annual production. So maybe 1,500 or so of the 'economy' steel models, not many for worldwide sale. The precious metal 321s are 4 to 6 times more expensive at retail, even greater at wholesale, so the tendency would be to make as many Pt and Au ones as the market could absorb. The 321 steel version will always be hard to get, that's by design.

Keep in mind while the Capopus gold is only gold and not platinum, because its on bracelet it actually costs more than the platinum, about 30% more in fact. Of the two IMO the platinum is still the pick due to the dial but its exceptionally big money and 400/year of the pair I think will be a bit of a stretch when there are also so many other non-321 precious metal Speedmasters as well.

Evitzee · May 4, 2022

dsio
Keep in mind while the Capopus gold is only gold and not platinum, because its on bracelet it actually costs more than the platinum, about 30% more in fact. Of the two IMO the platinum is still the pick due to the dial but its exceptionally big money and 400/year of the pair I think will be a bit of a stretch when there are also so many other non-321 precious metal Speedmasters as well.

Perhaps, it all depends on the lure of the mythical 321. Many buyers will go for a gold 3861 and be happy, others will want that 321. Depends on how Omega plays the 321 violin. But Omega is firing on all cylinders now, old style historical product (321) and modern product (3861) in both steel and gold versions. Take your pick from $6,000 to $81,000...something for everyone.

Robert-Jan · May 4, 2022

Evitzee
I'm just guessing here but I think they could easily sell 100-200 each of the Pt and Au versions a year, so maybe 400 a year. That's 20% of a 2,000 annual production. So maybe 1,500 or so of the 'economy' steel models, not many for worldwide sale. The precious metal 321s are 4 to 6 times more expensive at retail, even greater at wholesale, so the tendency would be to make as many Pt and Au ones as the market could absorb. The 321 steel version will always be hard to get, that's by design.

400 a year in precious metal sounds like too many for me. Anyway, indeed the profit is higher perhaps, the retail margin is the same though, normally speaking. But let me make a note here: Rule of thumb is that normally the retail margin is 2x, so the retailers purchase at 50% of the retail price, minus VAT on the retail price that they have to pay to the tax authority. I do know though, that the margins can differ per brand, but also on special watches, and the Calibre 321 powered watches are definitely treated differently in pricing/margins from the other Omega watches. Omega didn't tell me, but my assumption is that their margins (for them, and for the retailer) are actually not that big on the caliber 321 watches, at least not on the steel models. This could be an important reason that boutiques go first, but this is a guess/assumption.

Anyway, in the end, it also doesn't matter that much. They will get a maximum of 2000 caliber 321 movements per year, period. There's little we can do to increase that number, or have a say in the spread on steel, gold, and platinum models.

cvalue13 · May 4, 2022

Evitzee
I'm just guessing here but I think they could easily sell 100-200 each of the Pt and Au versions a year, so maybe 400 a year. That's 20% of a 2,000 annual production. So maybe 1,500 or so of the 'economy' steel models, not many for worldwide sale. The precious metal 321s are 4 to 6 times more expensive at retail, even greater at wholesale, so the tendency would be to make as many Pt and Au ones as the market could absorb. The 321 steel version will always be hard to get, that's by design.

Agree 100% (from the same armchair).

I would be shocked to discover that these precious metal examples are designed and manufactured on an expectation of double-digit sales per year, even with the per-unit revenue premium.

Robert-Jan
Sometimes I get the feeling fans and enthusiasts are trying to "overthink" a lot of stuff that is going on or happening... Often in a fun way though 😁

😁

To be fair to us enthusiasts, Omega is intentionally information-baiting. There is a reason they don’t tell anyone, including journalists, their production numbers.

And, just the same, there is a reason they restrict production to such limited numbers (which has nothing to do with the supposed “difficulty” of having a “single watchmaker” put it together 🙄).

Evitzee · May 4, 2022

Robert-Jan
Sometimes I get the feeling fans and enthusiasts are trying to "overthink" a lot of stuff that is going on or happening... Often in a fun way though 😁

RJ

"Overthinking" is what we do here on OF, we can't let reality intrude on our fantasies.

cvalue13 · May 4, 2022

Robert-Jan
Omega didn't tell me, but my assumption is that their margins (for them, and for the retailer) are actually not that big on the caliber 321 watches, at least not on the steel models. This could be an important reason that boutiques go first, but this is a guess/assumption

RJ, I’m both confused and very interested in this assertion.

I can’t imagine anything that causes a SS NEW321 to be anything but far higher on those ‘halo’ products.

A $7,000 main-line speedy pro has no substantive reason to be of higher margin than a $14,000 NEW321.

To believe that, does one have to I guess believe all the “single watchmaker” bit emphasized by the Omega marketing wing? Few around here believe that (especially since several around here, as watchmakers, themselves ‘fully assemble/disassemble’ 321 movements on a regular basis, and from not new-from-bin parts.)

There may be some sunk R&D costs to having revived the 321, but I can’t imagine that effort being more costly than developing the new movement in the mainline Speedmaster.

This is all from the armchair, and you surely have better information than I, which is why I am so interested to hear how it is possible that a $7000 stainless steel Speedmaster has a better margin than a $14,000 Stainless Steel Speedmaster.

By the way, I own one of those $14,000 Stainless Steel Speedmasters, and think it is worth every penny to me. But to date I have been under no delusion that I was paying a premium for some thing other than a substantive difference in development and manufacturing costs, regardless of what the Omega marketing machine fantasizes.

Evitzee · May 4, 2022

On some level I can believe that Omega isn't making much money on the NEW321 even with the premium price, it's often hard to make money on a product where you are only making 1,000 to 2,000 pieces a year with a disruptive production, assembly process. There were obviously some development costs but it isn't a cutting edge piece of gear, it's an old, old obsolete design. Yet it's only a small fraction of the company's business. So there are lots of built in inefficiencies here. I think Omega largely did it as a marketing effort to increase the focus on the whole NASA tie-in as they rolled forward with the new 3861, and that seems to have worked pretty well. Hell, they even had a gig with Swatch to highlight the space tie in. But as a stand alone product, the NEW321 is probably a headache for Omega, but one they do to keep the focus on the main 3861 line which is their future. It's essentially an advertising program to which a few Speedmaster fans get to participate in by getting one of the few produced.

OmegaBHR · May 4, 2022

Raynald leaves information out so he can read threads like these in bed wearing his Snoopy PJs laughing his ass off to sleep.

cvalue13 · May 4, 2022

Evitzee
year with a disruptive production, assembly process. There were obviously some development costs but it isn't a cutting edge piece of gear, it's an old, old obsolete design. Yet it's only a small fraction of the company's business. So there are lots of built in inefficiencies here.

yes, to some degree we’re here passing over the nuances of sunk R&D/marketing costs “behind” the production of each unit. On that “global” net revenue view, I can see the SS321 having its net revenue per unit lowered significantly. Perhaps, even, making up for the 100% difference between the cost compared to the 3861.

However, as you point out but out differently: all these global R&D/marketing inefficiencies are ultimately by design.

I think if we instead ignore these background costs, and focus on the more limited per-unit manufacturing and materials costs, it’s on that view the SS321 at $14K is surely of higher margin that the 3861.

And perhaps that is all that is going on here: a toggling between an all-in view of margin across the model, vs the more localized view of margin at the unit level. Choose which interests you more.

Personally, I’m less interested in the all-in view of margin given that it is essentially inefficient by intentional design. And they do this inefficiency at the model level, as you point out, to then across models bolster overall brand perception and sales.

Which is to say, if we’re going to look at the all-in view of margins, that would seem to require going even further and giving the NEW321 sales some revenue credit for increased 3861 sales, etc., etc., etc.

But ai can see now, the frame of mind from which someone at Omega might off-hand simply say “oh our margins on the 321 at $14K aren’t as good as on the 3861 at $7K.”

Archer · May 4, 2022

cvalue13
yes, to some degree we’re here passing over the nuances of sunk R&D/marketing costs “behind” the production of each unit.

Not a lot of R&D needed. Omega has been repairing these movements from the day they were discontinued back in 1968, and they have been making the individual parts for them all that time (in addition to Breguet using a dressed up version of the movement up until not too long ago). So the only "R&D" in the movement is really the new plating - the rest of the movement was designed decades ago, and all they would have to do increase the batch size of production to ensure that they had enough parts for another 2000 watches a year. Keep in mind that quite a few parts for the 321 were carried forward in later versions, so some of the parts were being made for production of 861/1861 movements. Yes, they would have to make a "new" case, but again most of the design work is already done there - just tweaks needed.

I know someone will talk about scans and all that, but that's just marketing - nothing more. So most of those sunk costs are marketing.

rcs914 · May 4, 2022

cvalue13
Not, of course, issued by NASA, though - and also apparently without NASA’s permission, nor with Scott having properly vetted the watch as one of his approved personal items taken aboard the craft.

The entire Bulova saga being a rather sorted affair, with the company trying all manner of political or litigious pressure to unseat Omega’s position within NASA - but failing to provide any equipment adequate for the job.

Given the Bulova company’s overall behavior set, the Scott incident comes off rather suspect.

Alan Nelson’s 1993 article, while itself having some inaccuracies, was the result of extensive FOIA documentation that does itself and without commentary a rather good job of painting Bulova as … petty?

SUPER petty, given that the watch they passed of as a "Bulova" was nothing more than a redialed Universal Geneve

Rodsch · May 8, 2022

Thanks so much to Omega and fratello that i had the Chance to attend this speedy tuesday Event in Biel.
It was such a great Experience and honor to be there.

hansmaulwurf · May 8, 2022

Looks great, thank you for the impressions we get from that event 👍

Robert-Jan · May 10, 2022

cvalue13
RJ, I’m both confused and very interested in this assertion.

I can’t imagine anything that causes a SS NEW321 to be anything but far higher on those ‘halo’ products.

A $7,000 main-line speedy pro has no substantive reason to be of higher margin than a $14,000 NEW321.

To believe that, does one have to I guess believe all the “single watchmaker” bit emphasized by the Omega marketing wing? Few around here believe that (especially since several around here, as watchmakers, themselves ‘fully assemble/disassemble’ 321 movements on a regular basis, and from not new-from-bin parts.)

That's up to them to believe it or now. I have been to the caliber 321 workshop, and witnessed the manufacturing and assembly process of the cal 321 pieces.

cvalue13
There may be some sunk R&D costs to having revived the 321, but I can’t imagine that effort being more costly than developing the new movement in the mainline Speedmaster.

This is all from the armchair, and you surely have better information than I, which is why I am so interested to hear how it is possible that a $7000 stainless steel Speedmaster has a better margin than a $14,000 Stainless Steel Speedmaster.

I am talking about the retail margin. Not the margin on production. Retail margin is normally 50% - VAT on the total price. From what I understood, is that the retail margin on the Calibre 321 is less than 50%. Also, if Omega only sells it through boutiuqes, the retail margin is what they keep in their pockets anyway. So I guess that this makes up for the higher cost price.

cvalue13
By the way, I own one of those $14,000 Stainless Steel Speedmasters, and think it is worth every penny to me. But to date I have been under no delusion that I was paying a premium for some thing other than a substantive difference in development and manufacturing costs, regardless of what the Omega marketing machine fantasizes.

Well, again, that's tough to argue with. To some it is worth it, and to others it isn't. Let's not make the mistake here to think the cost price of the Speedmaster (or any watch) is anywhere near retail. But the cost price of the Calibre 321 watch is definitely higher than the steel & standard1861/3861 models.

[Video] Speedy Tuesday Event Report — Biel Edition 2022

Evitzee

dsio

Evitzee

Robert-Jan

cvalue13

Evitzee

cvalue13

Evitzee

OmegaBHR

cvalue13

Archer

rcs914

Rodsch

hansmaulwurf

Robert-Jan

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