Timeless Timepieces: The Rolex Story

When most people think of a watch brand, they instinctively think of Rolex. The company has been at the forefront of watchmaking for over 100 years and is a Swiss national icon. But beneath the crown, there is a fascinating tale of one man's vision, an unstoppable marketing machine, and flawless craftsmanship. Join us as we explore the company's history, its watches, and what makes Rolex the undisputed king of the watch industry.

• Founding, expansion, and moving: Rolex was founded in London in 1905, and initially acted as a wholesaler of watches for local jewelry stores. It would eventually go on to start manufacturing its own watches and moved to Geneva after the First World War.

• Masters of marketing: Since its early years, Rolex has proven itself to be a master of branding and marketing. Many of its campaigns have been as successful as they have been bold.

• Craftsmanship: Since the first Rolexes ever were produced, the company has been obsessed with making the best watches they possibly can. This includes everything from innovating when there is a need to do so, to constantly improving their manufacturing methods.

• The Quartz Crisis: When Quartz watches were introduced in the late 1960s, it started a complete revolution in the industry. Rolex survived when many others didn't by focusing completely on the luxury side of the market.

• The Hans Wilsdorf Foundation: Rolex is privately held and owned by a foundation that bears the name of its founder. It is extremely secretive and incredibly wealthy.

• Epitomizing luxury: In every sense of the word, Rolex symbolizes luxury. Thanks to its craftsmanship, obsession with quality, and exclusiveness it's become one of the most iconic brands in the world.

Rolex is, unequivocally, one of Switzerland's most famous and iconic companies. But its founding didn't take place in some quaint mountain village or on a backstreet in Geneva. What would eventually become the Rolex we know today was founded by Hans Wilsdorf and his brother-in-law Alfred Davis in London in 1905.

Hans Wilsdorf was, as revealed by the name, not British. He was born in Bavaria in 1881, and after gaining experience in Switzerland's watchmaking industry, he moved to London in 1903. His first years in England were spent working for a Swiss watchmaker, but in 1905 he decided to open up his own business

Wilsdorf and Davis, as the company was called when it was founded, opened up shop in Camden and initially acted as a sort of wholesaler for London jewelers. The pair would import high-quality Swiss movements, put them in cases, and deliver them to jewelers across the city who would then stamp the dials with their own names. This strategy worked well in the beginning, and the company was soon ready to start selling watches under its own brand.

But what about the name? While Wilsdorf and Davis is a fantastic name for a law office or an accounting firm, one must admit that “Rolex” packs a little bit more of a punch. Hans Wilsdorf agreed with the statement above, and while all of their watches had been branded with Rolex since 1908, this also became the name of the company in 1915. The name was chosen for a number of reasons – the most practical being that it was short enough to fit on the face of a watch.

But there are plenty of other five-letter combinations that can be stamped onto a watch face, but Wilsdorf saw the value in having a powerful name behind his brand. Rolex was easy to pronounce in nearly all languages, had a luxurious air about it, and according to him sounded like a watch being wound. The company went through a couple of iterations in regard to its name throughout the 1910s, but in 1920 one version finally stuck: Rolex SA.

An early Rolex wristwatch

An early Rolex wristwatch

After moving on to selling watches themselves, Wilsdorf was now ready to go all-in on what he believed was the future of time telling. Wristwatches at the turn of the century were dainty and designed to be worn on integrated bracelets for women. Men, on the other hand, almost exclusively utilized pocket watches, and the idea of a man (or a woman not from the upper echelons of society) wearing a wristwatch was for many a ridiculous one. But Wilsdorf was convinced that the wristwatch had a future among the general public, not just with Europe's aristocratic women. While the societal and fashion norms of the time were one roadblock to navigate around, there was another slightly more practical problem to solve – accuracy.

Up until this point, pocket watches were more accurate than wristwatches, in large part due to the fact that most manufacturers had far more experience in those types of movements. But using the skills and knowledge gained in the Swiss watchmaking industry prior to his move to London, Wilsdorf set out to change this. He took one of the movements produced by Rolex's supplier Aegler, modified it, put it in a case, and sent it off to Bienne, Switzerland for it to be tested and rated by the Official Watch Rating Center. It passed all tests with flying colors and was awarded the first-ever certificate of accuracy for a wristwatch.

But Wilsdorf was a man obsessed with accuracy and quality, and while receiving the rating from OWRC was a good first step, he wasn't ready to rest on his laurels just yet. In 1914 he sent a Rolex Watch to the Kew Observatory, the UK organization tasked with rating marine chronometers for the Royal Navy. At the time, it was by far the largest and most powerful navy in the world, and none of its ships were able to navigate without having accurate timekeeping onboard. This in turn means that the tests carried out by the Kew Observatory were, to put it lightly, extremely stringent.

After going through 45 days of testing (similar rating institutions in continental Europe usually only tested watches for two weeks), the Rolex was the first wristwatch ever to be awarded a class A certification by the Kew Observatory. Before this point, only marine chronometers had been able to meet the requirements needed to be granted the best possible certificate. Once his watches were proven to be as reliable as the clocks used to navigate the most powerful battleships in the world, Wilsdorf was satisfied. Naturally, the two certificates were used extensively in the marketing of Rolex watches.

With the reliability issues firmly put to rest, he just needed to convince consumers to finally leave pocket watches in the past. As the news reached him that Archduke Franz Ferdinand and his wife had been assassinated in Sarajevo, it's difficult to imagine that he thought the now unavoidable war that was to follow would be the catalyst for wristwatches becoming the preferred method of telling the time.

While the First World War is known for the abundance of new machines and methods that humans had found for killing one another, there was another, smaller, development born out of necessity in the trenches that is much more pertinent to our story. Wristwatches had started to see some use among men in peacetime, but in the mud and horror on the Western front, they were now going to get their breakthrough in earnest. Most people before the war saw wristwatches as jewelry – not as a tool.

But this was about to change.

When the greatest powers in Europe went to war with one another in the summer of 1914, they brought with them a host of new inventions: machine guns, previously unfathomably large artillery pieces, razor wire, airplanes, and eventually the most gruesome of them all: poison gas. While the tools of war had evolved and become more intricate and deadly, the troops that were to wield them were stuck in the past. In the first weeks and months of the war, cavalry was still used, none of the armies equipped their soldiers with helmets, and some officers did their fighting wearing white satin gloves.

But as is often the case in combat, innovation became a necessary tool for bettering the odds of survival. While not as pivotal as equipping one's troops with helmets, armies soon realized that they needed to provide their soldiers with a better way to tell the time. As the officers in the trenches would soon realize, the pocket watch is not designed for war. Armies had become larger than ever, and the need for coordinated, large-scale pushes and advancements had grown with them. One effective way of coordinating this was through the use of synchronized watches, with officers guiding their troops forward in previously agreed-upon intervals. But as one is navigating over no man's land with a rifle in hand, stopping to fiddle with a pocket watch turned out to be a very effective way of getting shot.

This is also where Hans Wilsdorf enters our story again. Rolex, like many other watches manufacturers at the time, produced what would go on to be dubbed “trench watches” after the war. These were smaller than your typical pocket watch (but relatively similar to what Rolex already produced for private individuals) and were strapped to the wrists of officers, allowing them to quickly glance down at their wrists, note the time, and continue to fire their weapon.

Trench watches would see extended use throughout the war and after the armistice agreement was signed, the soldiers who had become accustomed to telling the time by glancing down at their wrists continued to wear them upon their return home. The wristwatch was no longer seen as something exclusively for well-to-do ladies — it was something that had become an everyday essential for everyone.

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Rolex did well during the war and, despite the nationality of its founder, equipped the British army with durable watches throughout the conflict. But as all of Europe's guns fell silent in unison at the stroke of 11 AM on November 11th, 1918, Wilsdorf and his company soon faced a problem: post-war tariffs.

Unsurprisingly, waging a war at the scale of WW1 was incredibly expensive, and while Germany was to pay reparations to Britain there was a screaming need for capital to run and rebuild the economy. One of the ways this was done was through import tariffs on luxury goods (such as watch movements from Switzerland), and lofty export duties (something which makes, for example, exporting silver and gold watch casings incredibly expensive). The time had come for Rolex to move to what in many ways already felt like home: Geneva.

In a safe haven beneath the Alps and on the shores of the glittering Lake Geneva, far away from UK tariffs and closer to its suppliers, Wilsdorf was ready to take the next steps in the company's journey. Wristwatches were now something for everyone, and Rolex had been the first out of the starting blocks in producing reliable and accurate models. But the competition was catching up, and Rolex needed something new and exciting to sell, and more importantly: to base its marketing on.

Hans Wilsdorf was ahead of his time in many aspects of his professional life. He had foreseen that pocket watches would soon fall out of favor, with wristwatches swooping in to take their spot. While this certainly helped Rolex's journey to where they are today, it's nothing compared to his obsession with branding and marketing. His view on this is best summed up by himself, as according to Wilsdorf “only great marketing is needed to make a company successful”. On the banks of the English Channel one freezing October morning in 1927, the Rolex founder would find just what he needed to fire up his marketing engines.

Before we turn our eyes to the aforementioned marketing campaign, we must first familiarize ourselves with the new watch that Rolex wanted to sell. While wristwatches were growing in popularity year after year, they still faced a very real and practical problem: water.

Rain and dampness were something that had always been an issue and getting a watch movement wet unsurprisingly leads to a myriad of issues. But pocket watches lived their lives safely stored in breast pockets and without exposure to the elements. If Wilsdorf was going to continue to champion wristwatches as the modern timepiece he so firmly believed it was, he was going to have to find a way to make it waterproof.

In 1926, that's exactly what they did. The brand new Rolex Oyster Case featured a completely screw-down case back, bezel, and most importantly a completely redesigned crown that screwed into the case, which hermetically sealed the watch. The new Rolex Oysters were submerged in aquariums and displayed in shop windows with their watch hands steadily ticking, much to the bewilderment of passersby. But while this certainly impressed those who walked by jewelry stores, it wasn't quite as impactful PR-wise as what one English swimmer was about to do with a Rolex Oyster strapped around her neck.

Mercedes Gleitze had, on her 8th attempt, become the first English woman to swim across the English Channel. In the days following her record, a woman stepped forward and claimed to have done it faster than Gleitze in a previous year. This would eventually be proven to be a complete fabrication, but the damage to the perceived legitimacy of the record had been done. Gleitze was convinced to swim the channel again in what was to be dubbed the “vindication swim”, and Wilsdorf saw a golden opportunity to market the new Rolex Oyster.

Mercedes Gleitze ahead of her swim

Mercedes Gleitze ahead of her swim

As Mercedes Gleitze waded into the English Channel on a cold morning in late October 1927, she did so wearing a swimming suit, bathing cap, and a Rolex Oyster on a necklace. While this swim was undertaken to remove any doubts about her legitimacy as the record-holder, the press (which had organized the swim) hadn't exactly set her up for success.

While this was her ninth time in the strait separating France and England, it was the first time she had done it so late in the year and the water was freezing. After ten hours in the water, all of her extremities had gone numb, and she was starting to drift in and out of consciousness. Fearing for her life, the support boat that was following her close in tow did the only sensible thing they could and pulled Gleitze out of the water. While she had fallen short on her “vindication swim”, her record would eventually be ratified, providing her with the acclaim she very much deserved.

As in the case of the Rolex around her neck? After ascertaining that Mercedes was going to be fine (and more than likely wrapping her in as many blankets as humanly possible), the watch was inspected and declared to be in perfect working condition. While she hadn't managed to cross the channel, this mattered little in the grand scheme of Wilsdorf's plans.

On the day following the swim, he took out an ad on the entire first page of The Daily Mail. The ad featured pictures of Mercedes Gleitze, various Rolex Models, and instructions on how to order a brochure (in color). When looking back on the ad campaign, which continued to run for many months, one wouldn't be completely wrong to claim that Mercedes was the first-ever brand ambassador for Rolex.

Rolex continued to market its watches to great effect and enjoyed success in the interwar years. In 1936, Aegler detached itself from its other customers and initiated an exclusive partnership with Wilsdorf and his now blossoming company. From now on, it would only supply its movements to a single customer and continued to do so until 2004 when it officially merged with Rolex.

When the Second World War broke out, Wilsdorf's watches saw combat once more. Rolex watches had however become too expensive and weren't produced in high enough quantities to be bought in by armed forces. However, RAF pilots famously purchased Rolexes to wear during combat missions as they were unhappy with their issued timepieces, and it was not uncommon to see watches adorned with the now iconic crown on the wrists of Allied troops.

While Wilsdorf was German by nationality, this did not appear to be where his loyalties lay. Upon hearing that his watches were being confiscated from Allied servicemembers once they arrived in PoW camps, he devised a plan that was a win-win for all parties involved. Wilsdorf publicly announced that any Allied servicemember held as a Prisoner of War could write to Rolex in Geneva and order a watch with payment deferred until after the war.

As Switzerland was neutral during the war and the watches were technically still owned by Rolex, the Germans couldn’t confiscate them without violating Swiss neutrality. While it is unclear how many watches were ordered by servicemen, it's believed to be roughly 3000. Wilsdorf had no way of ensuring that he would receive payment for these watches when the prisoners were eventually released, which in turn meant that he was ready to essentially write these watches off completely.

The watches served as morale boosters in the camps and at the same time painted Rolex in a positive light branding-wise. Did Hans Wilsdorf do this out of the goodness of his heart, or just as yet another marketing ploy? While we will never know for sure, the two sides of the coin aren't mutually exclusive, and the answer is more than likely somewhere in the middle.

Hans Wilsdorf's wife, Florence, passed away in 1944 after a brief illness. Perhaps it was the passing of his spouse that led him to start thinking about his own mortality, and what would happen with his beloved company once he himself passed on. The couple had no children and Wilsdorf wanted to make sure that Rolex continued to thrive even when he was no longer alive.

The solution he came up with was the Hans Wilsdorf Foundation. It was set up as a charitable foundation and undertook various philanthropic projects while Wilsdorf was still alive. Upon Wilsdorfs eventual passing, all of his shares would be inherited by the foundation and it would become the sole owner of Rolex SA.

Hans Wilsdorf overseeing the assembly of Rolex Watches.

Hans Wilsdorf overseeing the assembly of Rolex Watches.

In 1946, Hans Wilsdorf founded Montres Tudor SA with a simple idea – he wanted to capture more of the market without damaging the pricing power and image of Rolex. Buying a Rolex in the 1940s wasn't as expensive as it is today, but in the years following the largest conflict ever, going out to buy the best possible watch wasn't something that was an option for many consumers. Rolex had, in many ways, suffered during the war and needed to find a way to increase its revenue, and do it fast.

The solution was to manufacture watches under the Tudor brand, aimed at the middle of the market. These watches utilized Rolex bracelets and cases but used cheaper movements and were stamped with Tudor on their dials. The decision paid off and in the following decades, Tudor thrived among consumers looking for a near-Rolex experience at a more attainable price.

Tudor is still a subsidiary of Rolex, but in recent years the two sister companies have made a concerted effort to disassociate with each other in the minds of consumers. It sits neatly at the “entry-level” of luxury watches and has found a distinct design language and brand identity. The brand was in somewhat of a limbo between 1990 and mid-2010, manufacturing watches that oftentimes felt somewhat confused and put together by a brand that had lost its way.

With mechanical watches seeing a resurgence in popularity, it was time to reboot and relaunch Tudor completely. The brand released three new watches in 2011 and went through a major revival in the following years, quickly establishing itself as a force to be reckoned with. Its series of Black Bay diving watches is one of the most popular entry-level luxury watches currently on the market. Tudor has been proven to be able to stand more than fine on its own two legs and has built up a large fanbase of consumers, and while the brand doesn't actively hide its association with Rolex, it's not something used in its marketing.

Tudor saw success upon its founding and quickly found itself tucked neatly into a market category that Rolex wasn't willing to dip its feet into. But while Tudor was establishing itself during the first years, it didn't hurt its parent company. Many were still willing to pay the premium it cost to wear the crown, a willingness that has only compounded in the years since.

In some ways, the 1950s is one of the most important decades in Rolex's history. The war was over, sales were pointing in the right direction, and it was time to expand their offerings. This was done by introducing of a series of “Professional watches”. These were quintessential “tool watches” designed to be even more functional than typical Rolex timepieces. Between the 1950s and 1970s, Rolex introduced the Submariner, the Explorer (and Explorer II), the Daytona, and the GMT Master. All of these watches are still part of the company's product portfolio today and have been immensely successful.

A Rolex Submariner from the mid 1950's.

A Rolex Submariner from the mid 1950's.

During the 1950s and 1960s, Rolex continued to ramp up its marketing and branding efforts with great success. The brand was seen as the pinnacle of watchmaking but wanted to broaden its image and its customer base. Instead of primarily leaning on its fantastic quality and the craftsmanship behind its watches, it was going to focus more on the people wearing them.

With the introduction of the professional watches in the 50s, Rolex was not just aimed at businessmen and well-to-do white-collar workers – it was to be seen as a companion and necessary tool for exploration, adventure, and daring feats of strength. Mentioning all of Rolex's marketing drives during this era is an impossible task due to the sheer scope of everything they did. Instead, we're going to take a closer look at two of their most successful and famous campaigns.

The first of these was the campaign surrounding the Rolex Explorer and the first summiting of Mount Everest by Sir Edmund Hillary and Tenzing Norgay. The pair became the first to climb the highest mountain in the world in 1953 and were equipped with Rolex watches while doing so. At least that's the way that Rolex painted the story, and the details are very murky. We know for a fact that Hillary wore a watch by Smiths, a British manufacturer, while Norgay wore a different watch. Rolex had equipped the expedition with 10 watches, but it is unclear whether or not Norgay was wearing it as he summited.

But that mattered little. Upon their return back to England for their publicity tours, they stopped in Mumbai where Rolex threw them a massive party, handed out watches, and signed them both up to become Rolex ambassadors. Strangely enough, Hillary did not speak much of Smiths after that night in India. Rolex also put in an ad in The Times, congratulating the pair and claiming that an Explorer had been the first watch to reach the summit.

Smiths (rightly so) protested and received written confirmation from Rolex that it was indeed their watch that had been worn at the top. But at this point, the Rolex marketing engine was revving at full speed and had no intention of stopping. Instead of using the fact that their watch had been the first at the top, they simply built the marketing of the Explorer on the fact that it was a watch built for mountaineering and adventurers.

Iconic Rolex ads throughout the years.

Iconic Rolex ads throughout the years.

The second was tied to the first-ever dive to Challenger Deep, the deepest point in the ocean. Jacques Piccard and Don Walsh piloted the submersible Trieste to the bottom of the Mariana Trench in 1960, and naturally, they did so with a purpose-built Rolex strapped to the outside of the vessel. Following their harrowing dive the watch was inspected, and just like when Mercedes Gleitze had spent 10 hours in the English Channel, it was declared to be in perfect condition. Although the specific model that had been used wasn't for sale, surviving a trip to the deepest point on earth painted Rolex in a spectacular light.

The effect of these marketing campaigns is difficult to quantify in concrete numbers, but it created a perception of Rolex that still stands today: the watches are accurate, durable, and can be trusted to continue to function regardless of the conditions. If a Rolex is tough enough to take to the roof of the world or to the bottom of the ocean, it's going to be more than capable of whatever the average person is going to put it through.

We're about to reach a crossroads in our story, but before we can proceed we need to talk about the two different ways that a watch can be powered.

The first of these is the traditional, and in all honesty, the more romantic way of doing things: mechanical movements. A mechanical watch operates using a complex system of gears and springs, relying solely on mechanical energy rather than batteries or electronics. At the core of a mechanical watch movement is a mainspring which releases its energy to power all of the tiny components that make the watch hands tick.

If you've ever seen a system of large cogs and gears turn in order to power, for example, a windmill – imagine the same principle just at a minuscule, incredibly complicated scale. For context, a modern Rolex movement contains roughly 200 parts.

The second is quartz watches more often than not simply called battery-powered). A quartz watch operates using an electronic oscillator regulated by a quartz crystal, which allows for highly accurate timekeeping. Unlike mechanical watches, quartz watches are powered by a small battery. The battery sends an electrical current through the quartz crystal, causing it to vibrate at a precise frequency – typically 32,768 times per second.

These vibrations create a stable and consistent oscillation, which is detected and measured by the electronic circuit inside the watch. The circuit then divides the frequency of the vibrations down into a single pulse per second. This pulse drives a small stepper motor, which moves the watch's hands forward in precise one-second increments, or in some cases, activates a digital display.

What a quartz watch lacks in terms of mechanical craftsmanship, it makes up for in other aspects. They are much cheaper to produce, the cost to maintain them is very low, and perhaps most counterintuitively when looking at price differences between quartz and mechanical watches: they are much better at keeping time. A watch bought for $50 powered by a quartz crystal will be more accurate than even the most expensive mechanical watch out there.

While watchmakers had known about the possibility of using quartz to power watches in the 50s and 60s and had utilized it in making large industrial timepieces nobody had figured out a way to equip a wristwatch with the new, modern, movement. That is until a team of Japanese engineers and watchmakers broke the formula and released what is arguably the most impactful watch ever: the Seiko Astron. Affordable, accurate, and with the Swiss watchmaking industry firmly in its crosshairs.

The Astron hit the market in 1969, and what followed was an upheaval of the status quo in the watchmaking industry. Consumers now had the choice between buying expensive, intricate mechanical watches or could choose a modern, cheap, and accurate way of telling the time. The Quartz Crisis (as the Swiss watchmaking industry would later call it) swept across the Alps, cutting down traditional manufacturers left and right.

Many small-scale watchmakers who had previously been able to export and sell their watches at modest prices saw their customer base completely disappear over just a few years, as quartz watches undercut them completely. By the end of the 1970s, quartz watches had passed mechanical watches in popularity.

The result was a bloodbath. The Swiss watchmaking industry as a whole was decimated and at first, appeared completely dumbfounded as to what to do. Switzerland was a nation of watchmakers, and producing high-quality mechanical watches was an incredibly important part of the country's national identity.

This, combined with the fact that the Swiss were so exceptionally skilled at what they did meant that many traditional companies were slow to embrace quartz, or in many cases flat-out refused to adapt to the new realities. This was due to a combination of pride, the fact that the entire watch industry in the country was built up around mechanical watches, and in some cases plain old denial of the situation at hand.

The outcome of this mindset was predictable, yet tragic. During the 1970s and the first years of the '80s, nearly 1000 Swiss watchmakers shut down and the situation was getting desperate. Mechanical watches would eventually go through what can only be described as a renaissance, but this mattered little to the Swiss watch industry which saw historic manufacturer after historic manufacturer shut down its facilities nearly every week.

This is where the Swatch Group enters the picture. The company was founded as SMH (Société de Microélectronique et d'Horlogerie) in 1983 through a merger of two companies: ASUAG and SSHI. ASUAG had been the largest producer of mechanical watch parts in the world, and SSHI was a conglomerate that owned brands such as Tissot and Omega.

The merger put some of Switzerland's most popular watchmakers and the largest movement manufacturers in the world under one umbrella, allowing all involved parties to cut costs and become more effective in their operations, thereby buying them some time and pulling them back from the brink of bankruptcy. The situation had been so dire that SSHI had become insolvent and had been seized by its creditors (mainly Swiss banks) in 1981, despite the fact that it was Switzerland's largest watchmaker by volume.

Through determination, a healthy dose of goodwill from Swiss banks (who perhaps saw it as somewhat of a service to their country), and some private investors, SMH was founded. And in 1983 they introduced the Swatch watch, which in turn would see wild success. These small watches came in funky colorways, were cheap and accessible, and perhaps somewhat painfully: were powered by quartz.

The Swatches would go on to become incredibly popular, and the profits were able to keep traditional manufacturers on their feet for the time being. Ironically enough, it wouldn’t be too far of a stretch to say that a small, plastic, quartz-powered watch saved the broader Swiss watchmaking industry. Today, the Swatch Group is the largest watch company in the world.

An overview of the M&A history of Swatch Group

An overview of the M&A history of Swatch Group

But how does all of this relate to Rolex? While consolidation, adaptation, and strength in numbers were one way to combat the circumstances of the Quartz Crisis, it wasn't the only way forward. Rolex, just like other watchmakers like Patek Philippe and Audemars Piguet, chose another path: luxury and craftsmanship.

While Rolex had been seen as one of the most skilled and meticulous watchmakers in the world for decades, the Quartz crisis meant that it now had to lean even heavier into luxury. This was not an issue for the company, and marketing campaigns soon started to focus on the romanticism, craftsmanship, and legacy that Rolex brought to the table. Sure, one could purchase an accurate and cheap watch from Japan or the U.S., but there was still only one company wearing a crown. Rolex branded itself as the pinnacle of watchmaking, a watch to be worn by successful, interesting, and adventurous people who appreciated historical heritage and the finer things in life.

After Hans Wilsdorf Passed in 1960, his shares were transferred to his foundation. The company had lost an irreplaceable leader and personality. While the people who were to follow could never become Wilsdorf, they would all do their best to continue his legacy. After a few interim solutions, the baton was eventually passed to André Heiniger. He had been a close friend and confidant of Wilsdorf and had been responsible for developing the South American market for Rolex. He took over as Director General (the European term for CEO) in 1962 and led the company for 30 years, with great success.

In 1992, André's son Patrick took over the keys to the kingdom. But Patrick Heiniger wasn't one for the spotlight. He was quoted on more than one occasion stating that he wished for the focus to remain on the true stars of the show – the watches – and not on the people in suits running the company. Patrick Heiniger didn't want to wear the crown himself, instead preferring to let the timepieces remain king.

His own aversion to attention aside, his impact and leadership at Rolex is something that simply can't be overstated. He led the initiative of making Rolex an entirely vertically integrated company, buying up all of its suppliers one by one. The crowning jewel in this was the acquisition and subsequent merger of Aegler, the company that had been manufacturing movements exclusively for Rolex since 1936.

But he also led initiatives to make Rolex more appealing for women. Rolexes had primarily been marketed towards men in the prior decades, and he felt (rightly so) that there were a lot of potential customers who weren't finding anything that appealed to them in the Rolex catalog.

With the help of his girlfriend, Nina Stevens, he oversaw and coordinated a push into women's watches. From the mid-2000s, Rolex would place an emphasis on ensuring that there were always appealing choices in women's sizes. Heiniger was once quoted saying, "Women are the future of Rolex," and today the company produces a diverse range of watches specifically designed and marketed for them.

Many enthusiasts' primary interest lies in the company's past. Vintage Rolex watches are an incredibly popular collector's item and while there are countless references from decades past, one is held by most as the holy grail: The Paul Newman Daytona.

Newman was an American actor, director, racing driver, and, objectively, an overall cool guy. He was gifted a Rolex Daytona by his wife in 1963 and wore the watch nearly every time he was seen in public. The Daytona Reference that he wore (6239) would go on to become iconic. The reasons for this are numerous, but they boil down to a combination of the watch's aesthetics, its rarity, and, of course, the fact that Paul Newman wore it.

It is one of the most coveted vintage Rolex pieces out there, and as you can see from the visual below, is often sold at auction for the price of 2-3 brand-new Porsche 911s.

The Price Appreciation of the Paul Newman Daytona

The Price Appreciation of the Paul Newman Daytona

But there is one Paul Newman Daytona that stands out among the rest – and it is the watch worn by the man himself. After spending time in the safety deposit box of one of his relatives, it was put up for auction in 2017. The watch had been a gift to Newman from his wife, and is inscribed with the words “Drive Carefully – Me”. After intense bidding, the watch was sold for $17.75 million, the highest price ever for a wristwatch at the time.

However, the vintage Rolex market is not completely inaccessible to everyone who’s unwilling to part with the amount of money it would cost to buy a small house. Thanks to Rolex producing so many watches for such a long time, some vintage Rolexes can be bought from private individuals and independent dealers for the price it would cost to buy a new entry-level luxury watch.

Rolex has been completely vertically integrated for close to 20 years, owning and controlling all parts of its manufacturing. This is done through four different manufacturing facilities, all located in Switzerland. One for final assembly, quality control, and global headquarters, one for the manufacturing of movements, one for R&D and case-making, and one for the production of dials and gem setting.

The factories are themselves marvels of engineering and architecture, and the global Rolex Headquarters consists of 10 stories in total – with 5 of them hidden underground. These subterranean floors are one of the most secure and secret parts of Rolex, and employees can only access rooms that are critical to their specific line of work. They have also been the cause of much speculation over the years, with rumors floating around that Rolex has added even more space underground.

Now, you might be thinking something along the lines of "Surely Rolex can't be completely vertically integrated? Where, for instance, do they source the steel and metal alloys for their watches?”. Well, they make it in their own in-house foundry of course. The smelting of alloys and gold is overseen in their purpose-built labs, where they have some of the best scientists in the world (including a couple of Nobel Prize winners) overseeing the production.

Rolex is known for and prides itself on perfection in its products. Failures, defects, and other issues that might have occurred during production are completely and utterly unacceptable. To ensure that every single watch that is shipped from its final assembly site in Geneva is up to the standards they have set themselves, the testing and quality control are incredibly detailed. All parts are, naturally, tested many times over while they're being assembled, largely by hand, but once a watch is completed the real trials begin.

The process looks different for all models but goes through roughly all of the same steps. The watches are tested for their water resistance in purpose-built pressure chambers, with a 25% extra margin. For example, the Rolex Submariner is rated for 200 meters of water resistance but is tested down to 250 meters to make sure that everything runs correctly. The watches are checked for timekeeping in a number of different positions over the course of several days. Watches are photographed, left in place for 24 hours, and then photographed again. If they’re off by as much as a second, they're sent back for re-adjustment.

Rolex has also built custom machines to help them out in their testing. For example, they've built a machine that can open and close a clasp 1000 times over a matter of minutes to ensure that everything works as it should. They also have a purpose-built sorting machine for gemstones and jewels that identify fakes or less-than-desirable stones. It finds a fake every one in 10 million stones it examines, which to Rolex, makes the cost of the machine more than worth it.

Being finished and assembled by hand, it would only be natural to suspect that the odd mistake and faulty dial make their way to final testing. But one would be very wrong in making that assumption. Less than 0.1% of all watches show problems and have to be sent back for re-adjustment. Assuming that the estimation of Rolex sales number per year is correct at roughly 1.2 million (according to most journalists and experts in the field), it would mean that less than 1200 watches per year fail quality control.

The Hans Wilsdorf Foundation has been the sole owner of Rolex since 1960, and they have no intention whatsoever of letting go of any of their shares. Rumors are that Warren Buffett once tried to purchase Rolex but his offer was politely, yet firmly, declined. However, the Oracle of Omaha is still very much a fan of the company and is almost never seen without his gold Rolex Day Date on his wrist.

Despite its size (Rolex is estimated to be worth north of $100 billion), next to nothing is known about the inner workings of the company. It is a privately held company incorporated in a country with some of the strictest banking confidentiality in the world, owned by a charitable foundation with zero obligations to disclose anything it doesn't want to disclose. And as you might've guessed, the Hans Wilsdorf Foundation is not one for conversation.

But this also means that, in practice, Rolex is a nonprofit organization. The foundation is extremely wealthy and is an organization with a lot of power and ability to get projects done. It owns an incredible amount of real estate and art and is involved in more philanthropic endeavors than can be counted. So why do they still make watches? The foundation is rich enough to continue its operations for hundreds of years without seeing the bottom of its coffers. The simple answer to that question appears to be: because they want to, and because they’re very, very good at it.

It would be close to criminal to write this piece without spending some time discussing what is one of the most iconic watches of all time: The Submariner. The divewatch has been around since 1953 and is one of Rolex's most popular and coveted models. There are a number of different iterations of the watch, including different colorways and with and without date windows, but all with its distinct appearance. It has become so iconic that when many people think of a watch, it is a Submariner they see in their minds.

Since the Hans Wilsdorf Foundation doesn’t disclose any of its sales numbers we’ve taken a look at auction data to track the demand and the premium that people are willing to pay in order to get their hands on a standard issue Submariner. As we'll explain in more detail below, unless you spend years on a waitlist, getting a hold of a Submariner can be a tricky undertaking, and many use third-party dealers or local auction houses to buy their dream watch. As is the case with the Paul Newman Daytona, prices spiked during the pandemic, but have since crept closer and closer to the list price.

Regardless of the fact that demand and prices have come down slightly, the model is still one of the most traded on the secondary market with over 4000 Submariners bought and sold every month.

The ups and downs of Rolex Submariner auction prices.

The ups and downs of Rolex Submariner auction prices.

If you were to stand up from your computer or stash away your phone and head to a Rolex authorized dealer right this second with the aim of purchasing a brand-new watch, chances are very high that you wouldn't be able to do so. Controlling the supply of its products is incredibly important for a luxury brand like Rolex, and it produces far fewer watches than what demand dictates it should.

This scarcity in turn brings with it an inherent exclusiveness. Rolexes are so desirable, and difficult to get a hold of, that it's not uncommon for people to spend years and years on a waiting list with no guarantee that they'll ever get the call to buy one. For rarer and more expensive pieces, such as limited runs of the Daytona, it often requires a long-standing relationship with the dealer in question.

But this also speaks volumes about the demand for Rolex. As you've been made aware by now, the Hans Wilsdorf Foundation and the company as a whole are incredibly secretive about everything they do, and the public knows very little about the financials or unit numbers produced and sold every year. As previously mentioned, Rolex is estimated to produce roughly 1.2 million watches every year, with the company controlling roughly 30% of the global luxury watch market according to research by Morgan Stanley.

When looking at some of the most successful luxury brands in the world such as Hermés, LVMH, and Ferrari, to name a few, several things stand out as shared and defining characteristics. A long and storied history, exclusivity, quality, and status. Rolex checks the boxes on all of these.

Its heritage is, arguably, second to none. While it didn’t invent many of the things that made it famous, it popularized them. The demand for Rolex watches far exceeds supply, and its quality and craftsmanship is close to otherworldly. Rolex only associates itself with the most prestigious sporting occasions in the world such as Wimbledon, The Masters, The Monaco Grand Prix, and similar events. It partners with the Vienna Philharmonic Orchestra, it sponsors the Academy Awards, and it supplies explorers and scientists with watches.

But when you strip away all of its history, sponsorship, and association with athletes and artists you're still left with one thing: a watch. In this day and age, when almost everyone has an atomic clock tucked away in their pocket, doesn't that make spending 8,000 dollars or more on something that is, logically, completely redundant make it the definition of a luxury purchase?

Customers aren’t buying a Rolex because they need something to tell the time with. They’re buying an experience, the opportunity to take part in the brands heritage, to celebrate big milestones, or simply because they like the look and feel of them.

Rolex has reached the pinnacle of the watch industry through a combination of innovation, genius marketing, and making some of the best watches in the world. The resources and willingness to continue to strive for nothing but complete and absolute greatness means that its place as the king is more than likely secure for decades to come. While there are many who would love to sit on the throne of the watch world, there is still one company that literally and figuratively wears the crown: Rolex.