Maths, assumptions and hypothesis

[Ichiran]

Oftentimes when we express interest in a Patek, we were told by the Sales Associates that their store only receives 1 piece, or maybe 2 per year. This, along with the high demand, means that they won’t be able to estimate when they can fulfil your order. Do they really receive 1 to 2 pieces per year? Let’s explore into this.

According to the latest Morgan Stanley research on the 2021 Swiss watch industry, it was estimated that Patek sold 68,000 watches in 2021. This estimated figure was higher than the 62,000 units sold in 2018 (https://www.reuters.com/article/us-s...-idUSKCN1R22CK ), which is not unsurprising if we factor in capacity growth during these few years.

From Patek’s website, there are 366 AD globally as of today, and there are 137 models in the Patek catalogue with the breakdown as follows:
33 Grand Complications
32 Complications
11 Calatrava
3 Gondolo
3 Golden Ellipse
27 Nautilus
17 Aquanaut
11 Twenty-4

For the purpose of computation, I excluded the 15 minute repeater models (137 minus 15 = 122 remaining models) as Patek only made 50 minute repeater movements per year (https://collectability.com/education...ute-repeaters/), hence statistically they are not significant. Arithmetically, if each AD receive only 1 model per year across 122 models, we will get 44,652 watches across the 366 AD. This number is lower than the estimated 68,000 units sold in 2021 and the shortfall is 23,348 units which are the duplicate models allocated to all the 366 AD. Now, are we able to hypothesize what models these 23,348 duplicates are?

We know Patek sport models are extremely popular given their values in the secondary market. There are total of 44 sport models (27 Nautilus and 17 Aquanaut models). If we double the sport models, there will be additional 16,104 units that will bridge the gap to the duplicates. I was also given the impression that the Twenty-4 are sold in more units to cater for ladies’ demand, which could be the last part of the equation. Of course, we will never know the full picture because Patek doesn’t release much data.

Disclaimer: This is just a light-hearted post and I have too much time on a Saturday. Forgive me if the maths are way out or having ridiculous assumptions.

[Yobrooks]

Interesting post and I suspect you are not far off. I do not think each AD received 1 or do model, however. I suspect that pp produces all the watches and allocates most only upon an AD request. When I purchased a 5524, the AD said they sold their allotment (1)and had to request another (which took only 6 weeks to arrive).

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[dsquared2]

In my opinion, the idea that ADs only receive 1-2 hot pieces each is not true at all. If the AD is located in a very big city, the numbers are not these ones, maybe the double of them.

On top of, as far as I know, ADs are rewarded with additional hot pieces if they are able to sell a good number of non hot watches, such as calatravas, complications and grand compl.

To conclude, we cannot determine fixed figures for every AD because everyone has a different casuistic

[llngoc]

It may not be as simple since some models are less than one per year at some AD. For example, my AD receives only one out of the three 5968s per year. Not one of 5968a, 5968g-001 and 5968g-010 per year. So you can say that he gets one 5968a every three years.

Something like a 6119G, he would get more than one per year.

I wish he can get more than one 5740 per year ��

[Ichiran]

Thanks for pointing out. Yes it makes sense that different stores across various countries (or clientèle) receive different allocation.

[HMHM]

It’s a fairly reasonable calculation. Even though some big cities may get more allocation but if we average out across the 366 ADs and 3 salons own by Patek (Salons get more allocation), it will still be fairly scarce and limited, irrespective of the model one is looking for.

[Vasco]

Hey,

I think it is too difficult to calculate (I think some of us tried to :p)

As mentioned, some ADs (or Salons like Paris which is the only retailer in France) have very different supply levels. You'll have to leave aside all the application pieces (like enamel, MR) but also the Nautilus and Aquanauts...

Not forgeting that quartz, ladies watches are part of the total output (more than 25% if I'm not wrong) but with a very different demand/offer profile.

About the total 68K output: it seems also they had a below-59K production during in 2020 from what I heard (official). This means there was a delay already they needed to catch up with.

It doesn't seem (from what I heard, no insider info) that they reached the 68K last year.

We see closer from us the demand is very high vs previous years. The money was more available (savings during 2020, QE) but it has brought a significant number of new customers who weren't in watches before.

I believe a part will leave but also that another part will stay on the long run as they discovered a new field to be interested in (as when we discovered this small watchmaking world for the first time too).

I'm afraid we'll have to be patient for things to settle down a little bit but that the market will be different from now on, with an increased demand vs offer.

Unless brands catch up with volumes (hopefully without touching quality).

The production just doesn't keep up with the demand, at least currently.

[ezinhk]

Once QT kicks in demand will drop significantly. Already we see a flood of PP in secondary market.

[chows99]

Thanks for the interesting post!

May i know if the 366 AD include the different branches of big AD such as Hour Glass?

[Ichiran]

Originally Posted by chows99

Thanks for the interesting post!

May i know if the 366 AD include the different branches of big AD such as Hour Glass?

You're welcome

Yes each Hour Glass store is considered an AD. They are all listed individually in Patek's website.
https://www.patek.com/en/retail-serv...ized-retailers

[MadSpaniard]

Hi @Ichiran, interesting numbers for sure.

The key assumption I would question is the baseline of 1 unit of each model to each AD. In any extensive product line (122 models in this case), it's usually not a linear production distribution but rather much more of a bell curve, with popular and mid-price (or upper mid-price) models making up the bulk of production and therefore the available supply.

It wouldn't surprise me if most of Patek's annual production is around 1/4 or 1/3 of their 122 models, and it's also conceivable that a fair number of less popular models would see very little to virtually no production each year.

In short, I imagine Patek's production distribution is very curved and perhaps more concentrated on a core group of models than many people would expect. After all, Patek is a business with profit/margin objectives just like any other business.

Cheers.

[JR16]

This seems more complicated than a nerdle.

Seriously though I think your math does support many ADs saying they only get a couple of the “popular” or newer pieces per year.


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[pam66]

i was told that the dubai PP boutique receives about 25 5524 R&G models per year. if true this invalidates the linear distribution model - to some extent at least.

[subtona]

appreciate the effort and insight.

I can live with your analysis.

still in same boat.
"~no sir that is not available to you at this time. please come back when the market crashes."


expecting that the factory is not making all models simultaneously, I would imagine that certain models get priority in alternating years.
ie calatrava's in year one, nautilus year two?

your numbers may average out over several years but year to year short of the cycle of production, I expect they would look different.

[Ichiran]

Thanks all for your input.

The bell curve and/or non-linear distribution are both reasonable assumptions. It will be interesting to know which are the models sitting in the "fat" end of the percentile

Gus - interesting thoughts on the alternating production too. I never think about it this way but does that mean buyer of certain models could potentially wait up to 2 years?

[Pw92676]

I found this to be quite informative. Thank you for taking the time to write it. Regardless of the exact production numbers for each reference, elusiveness reigns supreme for each model.

[IamJacky]

Thanks for sharing and I also find this quite informative. I've been solely into Rolex in the past 10 years and am recently trying to venture into Patek Philippe and these numbers really put me into perspective.

[Pimpsy]

5712 was released in 2006. Based on your calcs, how many do you think have ever been made??

[Ichiran]

Originally Posted by IamJacky

Thanks for sharing and I also find this quite informative. I've been solely into Rolex in the past 10 years and am recently trying to venture into Patek Philippe and these numbers really put me into perspective.

Welcome to the brand, I'm sure you will love the timepieces. Though this is not the best time to buy a Patek from AD, wish you all the best in getting what you are looking for

[Ichiran]

Originally Posted by Pimpsy

5712 was released in 2006. Based on your calcs, how many do you think have ever been made??

I remember there used to be more AD (420+) a few years ago. If we are referring specifically to 5712/1A, my own estimate is 9,600 (16 years x 1.5 x 400) units sold to date. I use 1.5 because each AD on average receive 1 to 2 annually and the 400 AD align more to prior years than current year, where I believe some have been closed recently. The 5712/1A didn't used to be extremely popular in the past, and it was only after 2017 the model really took off. I think from 2017 to 2022, the number of 5712/1A sent to each AD is closer to 2. 9,600 is probably a lower estimate. If I use 1.8 piece per year, the number will instantly bump up to 11,520. It is still not high vis-a-vis current global demand and it is a collector's piece in my humble view

[Pimpsy]

Originally Posted by Ichiran

I remember there used to be more AD (420+) a few years ago. If we are referring specifically to 5712/1A, my own estimate is 9,600 (16 years x 1.5 x 400) units sold to date. I use 1.5 because each AD on average receive 1 to 2 annually and the 400 AD align more to prior years than current year, where I believe many of them have been closed recently. The 5712/1A didn't used to be extremely popular in the past, and it was only after 2017 the model really took off. I think from 2017 to 2022, the number of 5712/1A sent to each AD is closer to 2. 9,600 is probably a lower estimate. If I use 1.8 piece per year, the number will instantly bump up to 11,520. It is still not high vis-a-vis current global demand and it is a collector's piece in my humble view

I think that's probably very close. I've always guessed about 600 pieces a year.
Quite a very small number overall! Such a nice and special piece to own.

[DK7]

Originally Posted by ezinhk

Once QT kicks in demand will drop significantly. Already we see a flood of PP in secondary market.

What you mean?

[Remi B]

Originally Posted by DK7

What you mean?

Quantitative Tightening

[DK7]

Buying time!
Get out and look for good deals way to much money in the market for a crash.

[chows99]

Originally Posted by Ichiran

I remember there used to be more AD (420+) a few years ago. If we are referring specifically to 5712/1A, my own estimate is 9,600 (16 years x 1.5 x 400) units sold to date. I use 1.5 because each AD on average receive 1 to 2 annually and the 400 AD align more to prior years than current year, where I believe some have been closed recently. The 5712/1A didn't used to be extremely popular in the past, and it was only after 2017 the model really took off. I think from 2017 to 2022, the number of 5712/1A sent to each AD is closer to 2. 9,600 is probably a lower estimate. If I use 1.8 piece per year, the number will instantly bump up to 11,520. It is still not high vis-a-vis current global demand and it is a collector's piece in my humble view

Using this methodology for 5167a since launch in 2007, can i infer that there are around 12,000 pieces produced thus far?

[Ichiran]

Originally Posted by chows99

Using this methodology for 5167a since launch in 2007, can i infer that there are around 12,000 pieces produced thus far?

Not forgetting the 5167/1A because the bracelet and rubber strap are easily changeable. In my view collectors see them as the same model. Hence, you will need to multiply your number by 2 and add another 500 (Singapore limited release 2019) and the total would be 24,500. Again, this is just my estimate

Edit: may need to adjust the final number down because I understand on some older versions of the 5167/1A, the bracelet and strap are not interchangeable. However, I do not have the cut-off date.

[chows99]

Thanks for the informative reply!

I can really appreciate the context where there's really not alot of patek sports model around in comparison to daytonas and speedmasters.

[Ichiran]

You are welcome!

It's a bit more difficult to estimate for Rolex but I understand from my AD (quite large chain) they receive 1 SS Daytona per month (could be either black or white dial). If we multiply 12 by 1,800 (number of global Rolex AD according to https://millenarywatches.com/how-man...%20the%20world), we get 21,600 (2% of Rolex total production). Of course this should be the upper limit because my AD is one of the largest and they should receive more hot stock. Comparatively, this annual SS Daytona# number is almost twice that of the 5712/1A total historical release. Then again, there are more demand for Rolex globally, which explains why Daytona is very hard to get too.

# PM Daytona or PM Rolex in general are sold in much lower quantities than their SS counterparts.

[Oneday333]

Great article and discussions. Thank you

[Mr.GL]

Originally Posted by Ichiran

Oftentimes when we express interest in a Patek, we were told by the Sales Associates that their store only receives 1 piece, or maybe 2 per year. This, along with the high demand, means that they won’t be able to estimate when they can fulfil your order. Do they really receive 1 to 2 pieces per year? Let’s explore into this.

According to the latest Morgan Stanley research on the 2021 Swiss watch industry, it was estimated that Patek sold 68,000 watches in 2021. This estimated figure was higher than the 62,000 units sold in 2018 (https://www.reuters.com/article/us-s...-idUSKCN1R22CK ), which is not unsurprising if we factor in capacity growth during these few years.

From Patek’s website, there are 366 AD globally as of today, and there are 137 models in the Patek catalogue with the breakdown as follows:
33 Grand Complications
32 Complications
11 Calatrava
3 Gondolo
3 Golden Ellipse
27 Nautilus
17 Aquanaut
11 Twenty-4

For the purpose of computation, I excluded the 15 minute repeater models (137 minus 15 = 122 remaining models) as Patek only made 50 minute repeater movements per year (https://collectability.com/education...ute-repeaters/), hence statistically they are not significant. Arithmetically, if each AD receive only 1 model per year across 122 models, we will get 44,652 watches across the 366 AD. This number is lower than the estimated 68,000 units sold in 2021 and the shortfall is 23,348 units which are the duplicate models allocated to all the 366 AD. Now, are we able to hypothesize what models these 23,348 duplicates are?

We know Patek sport models are extremely popular given their values in the secondary market. There are total of 44 sport models (27 Nautilus and 17 Aquanaut models). If we double the sport models, there will be additional 16,104 units that will bridge the gap to the duplicates. I was also given the impression that the Twenty-4 are sold in more units to cater for ladies’ demand, which could be the last part of the equation. Of course, we will never know the full picture because Patek doesn’t release much data.

Disclaimer: This is just a light-hearted post and I have too much time on a Saturday. Forgive me if the maths are way out or having ridiculous assumptions.

Excellent post. Thanks

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