When it comes to Audemars Piguet, many people ask themselves, why on earth are AP watches so expensive? It is a legitimate question to ask considering that the average Audemars Piguet watch sets you back around the same amount as a brand-new mid-range car. That’s not even taking into account the highest prices out there – AP’s top-of-the-line models command amounts that could buy a whole fleet of new cars. So, let’s take a closer look at how these seemingly astronomical prices came about and whether they are justified or not.
What’s behind AP prices?
Audemars Piguet is one of the most famous watch manufacturers in the world. The watchmaker is considered one of the “big three,” next to Patek Philippe and Vacheron Constantin. It is also the only Swiss watch manufacturer that has been continuously owned by relatives of its founders since its beginnings in 1875. AP watches have always been beloved among the rich, famous, and powerful, and the brand exudes tradition, expertise, and exclusivity. But does that alone explain the high prices? Not quite. That being said, there’s no denying that when you buy an AP, you’re paying in part for the name.
Despite the big name, Audemars Piguet is a relatively small company with around 1,200 employees. Their production numbers are correspondingly low. Around 40,000 timepieces leave the AP atelier each year. As a comparison, industry giant Rolex employs some 30,000 individuals and produces between 700,000 and 1 million watches every year. AP’s relatively small numbers can be easily explained: Unlike Rolex, Omega, or Breitling, a large portion of the AP production process is done by hand, which, of course, takes time. Finishing the movements, cases, hands, and indices alone can take days or even weeks. Audemars Piguet’s guiding principle is clear: quality over quantity, which of course also means exclusive prices.
Speaking of movements, as a manufacturer in the truest sense of the word, AP develops and produces all of its own calibers. This is a very complex and lengthy process that involves armies of highly specialized employees. For example, the company’s watchmakers and engineers spent five years developing and bringing to market the new caliber 7121, a relatively straightforward movement that displays just the hours, minutes, and date. Movements with additional complications like a perpetual calendar or chime take even more time and energy to develop. The same goes for R&D costs; developing a high-quality caliber can easily cost several hundred million euros. Of course, these costs are also accounted for in the watches’ prices.
Another thing to factor into cost is materials. Precious metals such as gold or platinum are naturally costly, but even less exclusive materials like titanium or stainless steel aren’t cheap when you are looking at the quality Audemars Piguet uses for its watches. Moreover, more modern materials like ceramic or carbon fiber require the development and implementation of completely new production processes. This often requires new machinery, which likewise needs developing. It should thus come as no surprise that materials research is playing an increasingly larger role in watchmaking, one that goes beyond just asking how and where the latest high-tech materials from the aerospace industry can be used in watches. The durability of gold and platinum alloys are also constantly being tested and improved.
All of these tasks requires the work of highly-trained employees, and since Switzerland is not exactly known as a low-wage country, personnel costs are also an important factor to consider when it comes to pricing.
When you take all of these factors into consideration, Audemars Piguet’s list prices seem quite reasonable or at least comprehensible.
Audemars Piguet Prices: List Prices vs. Market Prices
Unfortunately, the official list prices recommended by manufacturers and the prices you see on the open market are often two very different things, and Audemars Piguet is no exception. For example, the Audemars Piguet Royal Oak “Jumbo” Extra-Thin ref. 15202ST is an absolute classic in the AP lineup and a favorite of watch lovers thanks to its affinity with the original watch designed by Gérald Genta in 1972. As of March 2022, the 15202ST has an official list price of $33,200. On the secondary market, however, prices of $165,000 and above aren’t unheard of. Just 18 months ago, you could have bought the same watch for around $45,000, and in March 2018, the 15202ST was selling for some $23,000.
It’s a similar story if you look at the Audemars Piguet Royal Oak Selfwinding ref. 15500ST. This three-hand version of the Royal Oak officially retails for $25,300, but the market price is currently above $85,000. Here, too, prices have risen massively in the past two years: In March 2020, the 15500ST cost an average of $25,000.
But how can one possibly explain such exorbitant price increases? In the case of AP, several factors are at play: As mentioned, the manufacturer from Le Brassus, Switzerland only produces around 40,000 timepieces a year. However, demand for AP watches far exceeds that, leading to long wait times at authorized retailers. Moreover, Audemars Piguet has been pursuing a direct-to-customer strategy for the last several years. The goal is to sell AP watches exclusively through special Audemars Piguet boutiques as opposed to traditional multi-brand dealers going forward. As a result, AP watches are becoming even more difficult to find “in the wild,” so to speak. In short, high demand and low supply – as every knows – lead to high prices on the open market.
But that still doesn’t explain why prices have gone through the roof in the last two years. For that, we have to take a little detour to discuss Patek Philippe and the Nautilus. Like the Royal Oak, the Nautilus is attributed to famed designer Gérald Genta. Both watches enjoy a similar cult status; a stainless steel Nautilus ref. 5711/1A is the grail watch for many watch lovers. That being said, Patek has always kept production of the model quite limited, resulting in years-long waiting lists and ever-increasing market prices. When Patek announced in 2021 that they would be discontinuing the reference without a replacement, the already absurd prices shot up to even more dizzying heights.
The hype around the Nautilus led many watch collectors to turn to the Royal Oak in search of a more affordable alternative. Thus, demand rose rapidly, driving up prices there in response.
When it comes to Audemars Piguet, however, the hype is solely focused on the Royal Oak and, to some extent, its more rugged sister model, the Royal Oak Offshore. The other collections remain unaffected. The Code 11.59 collection introduced in 2020, for example, has had a very difficult time winning fans and critics over. You can almost always find watches from this series for less than their MSRP on the open market. Audemars Piguet’s dress watch line, the Millenary, likewise flies under the radar. For instance, you can purchase a frosted rose gold ref. 77244OR.GG.1272OR.01 on Chrono24 for around $41,500, which is significantly less than the watch’s official list price of $64,500.
Are Audemars Piguet watches too expensive?
There is no question that Audemars Piguet watches cost a lot of money. However, it is important to distinguish between official list prices and market prices, especially when it comes to the Royal Oak. When you consider the level of quality involved, AP’s list prices are wholly justifiable. If you have a Royal Oak in mind, have a good relationship with an authorized dealer, and don’t mind waiting several months or even years, you may be able to pick up an icon at a reasonable price. Of course, you could buy the Royal Oak on the secondary market without the wait, but you will have to accept a hefty premium in return. At the end of the day, you really have to decide for yourself whether or not the price hike is justified.