WATCH-LOVERS these days have so much to choose from that it can be downright confusing. What's more, so many brands seem to be claiming that 'everything is made in-house'. The practical reality, however, is that the smaller your production is, the more likely it is that you'll have to outsource the parts that can only be practically made in very large quantities.

We're talking sheer economies of scale here. To put it simply, does it make any sense to buy very expensive machinery which will churn out a million microscopic, high-precision screws a month if you only sell something like 1,000 watches a year?

To help our readers understand just what's going on out there in the watch industry today, we bring you this summary of a presentation made by local watch enthusiast Ng Tjeng Jaw to Malaysian watch lovers last month.

A month ago, between Nov 22 to 26, local watch retailer Sincere hosted 'Conquest of Time' in Kuala Lumpur, probably the Malaysian capital's grandest ever watch exhibition.

During those five days, 23 watch brands showed off their latest and greatest over 25,000 square feet of very classy boutique space, and Malaysian watch-lovers were also treated to daily watch tours, classes and forums.

Girard-Perregaux, for example, conducted tours of their mobile watch Atelier, while Jaeger-LeCoultre taught attendees how to take a watch apart and then put it together again.

There were also daily educational talks and forums on matters horological, among them Mr Ng's topic, 'The Allure of a Manufacture Timepiece', which tried to give a better understanding of who's selling what out there in the universe of fine watches.

For a start, Jaw (as he's better known in the local watch community) pointed out there is no precise definition of the French term Manufacture when applied to watch brands, but it should suggest that these should be able to show they have at least one in-house designed movement as well as some component production capability.

That said, it is fairly common knowledge among watch-lovers that even some of the industry's big boys do go outside for some part of their production, though these might subsequently be altered, improved or modified (sometimes dramatically so) in-house.

Well-known examples, he revealed, include the ETA Valjoux 7750 chronograph movement known to be used by the likes of brands such as IWC and Panerai, the STT tourbillon movement said to be purchased by names like Harry Winston and Peter Speake-Marin, or the Christophe Claret minute repeater mechanisms said to be adopted and incorporated by Girard-Perregaux and Corum.

For a better big picture overview Jaw then moved on to differentiate for his audience the many different types of participants in the international watch industry today. BT readers who are so inclined may just be interested to find out which brands fit into which of these categories.

Starting with the simplest, he described OEM Brand Marketers as those who out-sourced all of their watch production. Indeed, their watches may never even enter their own premises, but instead get shipped direct to their network retailers by those who are contracted to make the watches for them.

The next step up belongs to those which Jaw defines as the Designers and Assemblers, and those with Proprietory Movements which are protected by copyright. Typically, design at least is in-house or inherited, though most if not all of the watch parts are purchased and assembled (rather than produced) in-house.

These days, he claimed, this can be a 'very common' practice even at the top end, so-called high horology, segment.

Moving further up the ladder of self-sufficiency would take us to those with In-House Development - those who design, develop and produce movements with the help of outside experts to solve specific bottlenecks. However, such outside consultants may not always be acknowledged publicly.

Finally, we come to the 'true' Manufactures, who are supposed to be responsible for just about every stage of the watch in their own physical premises - design, production, assembly, polishing and finishing. But even the majority of these, Jaw qualified, still depend to some degree on third-party component suppliers for specialised parts such as hairsprings, mainsprings, tiny screws and rubies.

Buyer beware

A very select few who are big enough, and strong enough, do however have plans to make even the latter parts themselves eventually, he said.

But at the end of the day, Jaw cautioned, buyers must decide for themselves just how important a factor it is for their purchase that they consider longer-term issues such as self-sufficiency and a willingness to invest for the future (rather than depend on outsiders).

Watches as investments?

Finally, in the question-and-answer session which followed his KL address, the oft-repeated question of watches as an investment came up for discussion, given the sometimes sizeable sums which can be involved these days.

Here, Jaw warned enthusiasts that watches are lifestyle items which should be bought as things to enjoy, much like fine cars, pens and wines.

'Purchases should therefore be seen in that kind of perspective, and not as investment items - even if some purchases may, with the advantage of hindsight, turn out to have been decent investments,' he advised.

Also offering the benefit of his considerable experience was the head of the Sincere Watch Academy, Patrick Tan. Commendably, he gave a well-considered perspective to the whole experience of buying the watch, most importantly the enjoyment of the purchase.

'I always prefer to tell our customers that they should buy watches because they appreciate the engineering and craftsmanship which goes into them, and because they can offer quite a nice sense of emotional enjoyment.

'If the purchase should someday make you some money, then it should be considered a nice bonus, but you should not in general look towards buying watches as an investment.

'For a responsible retailer like Sincere, we know the sums involved can be considerable to the average person. We don't want to give our customers any false expectations as that would be bad business, because there are better ways to invest their surplus funds.'

And with his permission, we offer to our readers as a third opinion on this very important subject the views of Wei Koh, editor-in-chief of the top-notch watch magazine Revolution. 'Ultimately if you try to resell your watch after you've worn it, the likelihood is you will lose significant money unless you purchased it second-hand to begin with (or there is strong demand for that particular model).

'However if you wear it, fall in love with it, and it becomes a constant companion throughout your adventure in life, then the price you paid for it or the potential windfall starts to pale in comparison to the pleasure you have derived from it over time.'

But, he warns: 'Be wary of some watch experts who wildly and even lasciviously tout the investment value of any or all timepieces. I consider it a rather monumental lack of responsibility to tell people that you will never lose money on a timepiece.'

For a humorously irreverent but highly informative read, check out Mr Koh's full thoughts on this matter in the new watch website www.horomundi.com, where he is super moderator and Jaw is chief moderator.