Officine Panerai

Does anybody know more about the production cost for a rare watch  ?

The thing is, 300 pce is very rare. We all know a zillion of other so called limited watches. AP, Panerai, Hublot, even Patek . Let's take an offshore for example. You just don't want to know how many LE's the make. But are they really so special ? 90% of their LE's are basicly exactly the same watch. Same movement, same dial (but with another color), 100% the same case, ...   The same can be said about my most favorite watch, the Patek 5070. Patek made 4 different versions but only the material and dial color changed. Movement and case were 100% the same. And the last example, all the LE Panerai's... always the same case being a Luminor, Radiomir or 1950. Somethimes an LE and mostly a regular production watch. And almost every time  the same movement which is a modified ETA / Valjoux. Somethimes they add a GMT, chrono or whatever but they use the case, movement, dials

Now looking at the 341 Egiziano we get a totally different story. They have to make a new design for the case. They need to make it, test it and finish it. Starting from nothing and making a case that will be used for 100.000 watches or starting from zero and creating a case wich will only be made 300 times must be a BIG difference. The production cost for both models will be as good as the same but in the first example the cost per watch will be much cheaper . The same thing for the bezel. They'll only make 300 of them. And what about the movements ? They didn't start from zero because they used a movement they develloped already. On the other hand, they changed it (no power reserve, no date ...) So here again we get a pretty unique thing - Although I'm pretty sure they will use that modified inhouse movement for other Panerai's in the future. Than, look at the dial. Exactly the same story somebody has to draw it, make it (test it ?) and this for only 300 pce.   And what about the sapphire crystal ? It is HUGE. Don't know if it's true but somebody once told me that making a big sapphire is very difficult and very expensive.  Going from a 30 mm diameter sapphire to a 33 mm diameter sapphire is only 10% bigger but the price is a lot more expensive than + 10%. The price difference between 30 and 36 mm sapphire could be 2 times more expensive. The price could be exponential. And the 341's sapphire is just like the rest of the watch huge ;-)

So,  19K for this UNIQUE watch isn't mabe expensive after all ...

That was a bit the problem with the JLC Polaris.

With a Limited Edition of a bit less than 1000 Watches ( 998 ) , you have a new case, a dedicated plexy, and a new dial, specific crowns, etc...

It would have been a bit less espensive if it wasn't a LE.

As for the Egiziano, this is exactly the same, as you perfectly stated .

Best.

Nicolas

I think the issue with most paneristis is the size and not the price.

 

For me if i can get one will be very happy and for sure it will get some wrist time.

 

Alepos

I love these kinda in-depth analysis!

You have stated your points clearly, and i totally agree with everything that you said!

Well, i just hope that i am able to get one piece only!

Cheers

Stephen

But only if OP will make 300 pieces and 300 pieces only!

I'm not exactly convinced that at EUR19k for 300 pieces OP would make enough to recoup the tooling cost so what would they do next on the 60mm case size?   Adding GMT, Power Reserve or chrono function?   I doubt it as it would simply defeat the original intention of historical homage.   So where does that leave us?    Normal production model w/ different dial colour/wording?   

I don't think a 60mm watch could ever become a regular production model.

probably a far fetched possibility but I can't help but wondering what OP would do to recover the R&D cost?   They're a business afterall and no reason for them to knowingly make a watch for a loss. 

Let's take a quick look at their limited edition pieces that were NEW casing design/dimention introduction at the time of release and NOT limited by the movement supply:

PAM52, the first 40mm Luminor Chronograph with zenith movement, limited run of 500 pieces.   Followed by:  PAM72/74, 121/122, 105, 108.  (I didn't list 168 as it was fitted with different movement but you get the idea!)

PAM64 1000m submersible, limited run of 500 pieces.  Probably another 2000 pieces or so of basically the same watch as PAM87.

PAM76 Luminor blackseal w/ cover, 300 pieces initially then all these variations of JV, Purdeys, Sealand, Shanghai boutique editions( urgh! )    *Not even sure if this truely qualifies as it's probably just new tooling from bezel level up so overall cost probably not as high as a truely new design*

PAM127 1950 Luminor, 1950 pieces then 1000 pieces of 217 and 150 pieces of 203, not even counting those OOR.

PAM187 47mm Luminor 1950 submersible chronograph, 1000 pieces and all those daylights that follows.

PAM191 60mm Compass 300 pieces, well this is one exception BUT it's a compass afterall so I would guess the R&D cost is a lot lower...

PAM194 47mm Luminor 1950 2500m submersible w/ helium release vavle, 1000 pieces.  NOW THIS IS THE TRUE EXCEPTION that the case hasn't been re-made, so far!

PAM198 45mm Radiomir w/ JLC 8 day PR movement, well it was released with 190/197 and all the in house movement variants were housed in this case size as well.   

PAM232/249/262 47mm Radiomir, total about 4000 pieces not counting the 309/322.

So there, drawing on these figures, without digging deep into the relative pricing, I would guess the MINIMUM that OP need to make is a run of 1000 pieces to justify the cost?

So what would the other 700 pieces of 60mm be? 

No message body

I have a feeling that this 60mm Egyptian will not be a one time unique production.

Panerai has spent a lot of money with tooling and producing these cases.  I would not be surprised at all if Panerai comes out with different versions of the Egyptian such as stainless steel version or another version with different dial.  In fact, I would probably say a 75% probability of seeing this 60mm case being used again in 2 or 3 years from now.

Cheers,
Anthony

but i really think that 60 mm is too big, even for Panerai.

Maybe they will make a 50 mm Egiziano one day  but in that case the production cost for the 341 wouldn't change, I'm not expecting another 60mm Egiziano in the future. IMO the 60mm Egiziano will stay a rare, unique really 'oversized' watch.

A 50 mm would be an option for a non limited Egiziano and they could add a chrono, gmt, date, ... to this piece but imo only if they would reduce the size to a wearable 45-50mm.

 

It really boils down to the number made in the limited edition. The R&D costs need to be spread over thousands of units in order for the watch to be profitable, if you're spreading it over a few hundred, then in order for it to be profitable, it's going to be very expensive.

Some companies simply don't make a profit on some watches, but they're exhibits of technological know-how.

Let's take Formula 1 racing. This is a most unprofitable endeavor. But they do it simply to prove the car company has the technical know-how to make it.

Many times, these companies store a limited edition away and then make a new movement but adding upon the base movement of that LE. Take the Jaeger-LeCoultre Reverso Septieme; this movement is basically a Reverso Grande Date with a day/night indicator. Whoa, look at the Reverso Grande GMT. The Septieme is basically a Grande GMT without the second time zone.

The Septieme would be one of those pseudo limited editions.

that OP making an ABSOLUTE limited run of certain pieces at break even just to reward the loyal collectors but given the popularity/profitability that they're enjoying right now, not sure if that's necessary.  

Moreover, given the huge complication and hassle they experienced with 195 and 203 not sure if they're ready for another round of headache. 

 

that is why if there is interest we will almost surely see this case used again

Without knowing the exact manufacturing method, it is difficult to determine cost per watch.

If the case is formed via multiple stage presses followed by a polishing process, then it follows that amortising the tooling cost will push up the cost per piece. However many small production runs will be produced on NC machines, so if you already own a 6-axis machine, it's merely a matter of calculating the cutter paths and proceeding. You will lose a lot of material in waste, but this can be recycled.

The design of a case and bezel would be done on CAD, no big deal especially if you have an original to scan, particularly with the limited WR of the watch (though I think it's under-rated, on purpose). For such a case, unique o-rings are probably necessary, but again, no huge expense.

Sapphire is actually quite unexotic and commonplace, with widespread use in optical systems due to its optical qualities. Yes, it's more costly than mineral glass or acrylic, but not to a huge extent.

Same goes for the movement. Not a big deal engineering wise, as it already exists, but you need to modify your production processes and QC to accomodate a mere 300 units.

All that being said, there are many other costs that would contribute to the 19K (quite aside from the fact that they can get away with it, after all, look at all the interest in the watch) such as cataloguing, spare parts support, service instruction....and this is before you get into any marketing costs.

And assuming they stick to 300, this is a proper LE with heritage, not some re-dial, different case-back or boutique edition.

 

 

And it's simply great that we have a great buddy like you among the Purists!

With your knowledge from your daily career, it certainly helps us alot!

Thanks and cheers !

Stephen