Stainless Steel Patek Philippe Nautilus Market Madness: Thoughts On The Current Market Situation

Since January of 2016, secondary market values of stainless steel Patek Philippe Nautilus models have surged in a fashion rarely seen within the sphere of preowned and vintage luxury watches. This phenomenon – and it is that – is exceptional for reasons including the relative age of the models involved, the magnitude of the surge, and the speed with which it has struck.

The present state of the Nautilus secondary market values provides a vivid illustration.

As of October 2019, the United States retail price of a steel Patek Philippe Nautilus reference 5711/1A-010 is $30,620. On a routine basis, this model sells between $60,000 and $70,000 as a used watch, and buyers have been known to secure slots on multiple dealer queues to buy a Nautilus expressly for resale.

Patek Philippe Reference 3700 Nautilus from 1976 (photo courtesy Kristian Haagen)

How did the watch collector community turn a 13-year-old model and its derivatives into a Bitcoin-like asset surge?

And how should watch collectors view the sustainability of this trend from an investment perspective?

Retracing this multi-year rocket ride requires equal measures of fashion and data analysis.

Patek Philippe Nautilus: historical background

The Patek Philippe Nautilus launched in its original form, Reference 3700, in 1976. As a relatively large (~40mm), luminescent, stainless steel, full-bracelet, automatic luxury timepiece, the Nautilus was remarkable for two reasons: style and innovation.

On the style front, the original Nautilus integrated all primary elements including case, bezel, and bracelet into a unitary system of shapes and subassemblies designed to read as a continuous whole.

This harmony of forms was pioneered by Nautilus designer Gérald Genta in 1972 on his Audemars Piguet Royal Oak.

Original Audemars Piguet Royal Oak from 1972

But the Nautilus advanced the state of the art with a better balance of lateral symmetry, a bezel whose inner face matched the geometry of its outer form and significantly improved water resistance by means of a sandwich-like case assembly.

The look proved so compelling that Patek Philippe has elected to impose few changes since the charter Reference 3700 “Jumbo” emerged from its Geneva gestation.

Regarding innovation, the Nautilus and its Royal Oak predecessor helped to establish the modern notion of a pure luxury sports watch.

While Rolex, Blancpain, and Omega sports models from the 1970s were plentiful, their market positions at the time dictated pricing comparable to a fine camera.

In contrast, the $3,100 Nautilus cost closer to the price of a used car. With inflation adjustment, the first Nautilus launched at the 2019 equivalent of nearly $14,000. It was both a sports watch priced like a dress watch and a steel watch priced like a gold watch.

Despite the impressive strides in design and refinement, the sports-oriented Nautilus model was an outlier in a Patek Philippe ultra-luxury model line then dominated by petite dress wristwatches and pocket watches.

With the rise of early mechanical watch collector communities in the late 1970s and early 1980s, Patek Philippe focused on pocket watches for the veteran enthusiasts and minimalist formal wristwatches such as the references 3520 and later 3919 to attract new customers from the emerging market for luxury wristwatches.

Through the 1980s, 1990s, and early 2000s, the Nautilus was considered a constant but not dominant presence in the Patek Philippe catalog. The thirtieth anniversary model from 2006, the $17,000 reference 5711/1A-001, was warmly but not hysterically received.

Patek Philippe Ref 5711/1A Nautilus in stainless steel from 2006

Early twenty-first-century auction sales of the first 3700 Jumbo never drew the same level of interest as the Patek Philippe pocket watches and complicated wristwatches that dominated headlines through this period.

An illustrative set of episodes witnessed a one-of-a-kind vintage Nautilus 3700 in platinum sell at Christie’s for 783,750 Swiss francs in 2013; a one-of-a-kind complicated Patek Philippe pocket watch known as the Graves Supercomplication became the most expensive watch ever purchased at a hammer price of CHF 22,237,000 in 2014 at Sotheby’s.

One of four known vintage Patek Philippe 1518 perpetual calendar chronographs in steel briefly became the world’s most expensive wristwatch with an auction price of CHF 11,000,002 ($11,136,642) at Phillips in 2016.

Patek Philippe Reference 1518

Patek Philippe Reference 1518

As late as the fourth quarter of 2016, the already aging 5711 often sold for $22,000-$23,000 preowned against a contemporary retail price of $24,840 at Patek Philippe dealers. By this point, Patek Philippe had added new dial colors, complications, and metal combinations to sustain interest as the fortieth anniversary of Reference 3700 came and went without a wholesale redesign of the Nautilus collection.

Nautilus market madness

First, it is important to illustrate the acceleration of the Nautilus model family’s upward trend.

The roughly $70,000 sale price of a used 5711 in June of 2019 represented a meteoric rise from the $22,500 sale price of the same watch in late 2016. But a deeper look at data indicates that the steepest slope of the value curve coincides with mid-year 2019; the greatest gains have been recent.

As late as March 2019, a Nautilus 5711/1A – full bracelet – would have sold for a sum between $40,000 and $45,000 on secondary markets.

A 60 percent value surge in the space of three months is not the mark of a durable trend; this is an asset bubble. Valuation comparisons from other realms of investment present unsettling parallels.

From April 1 of 2019 to June 1, Bitcoin surged roughly 70 percent; the notoriously volatile cryptocurrency is an uncomfortable comparison for any watch collector seeking safe harbor in a late-model preowned watch.

Patek Philippe Nautilus: breakdown of a breakout

No single reason explains the surge of Patek Philippe Nautilus values from January of 2017 to the present. Multiple factors must be entertained, but in descending order of influence: online media, men’s fashion, and core product appeal have pushed the Nautilus to the forefront of the watch market’s attention.

Patek Philippe Ref 5711/1A Nautilus (photo courtesy Tim Mosso)

YouTube, Instagram, Facebook, collector forums, and online journals likely bear responsibility for the rampant escalation of Nautilus values. Absent affirming hype, promotion, and sheer visibility, it is difficult to imagine how a global audience of watch collectors could have reached the same fever pitch concurrently.

In previous eras – and we’re talking eras as recent as the 2000s – the feedback loop between watch collectors and the secondary markets proceeded at a plodding pace. The spring and fall auction seasons produced their surge of headlines before disappearing from view; mass-produced steel sports watches rarely headlined these patrician galas. Printed journals represented the most reliable source of news from manufacturers and auction houses.

High-volume, commercial-scale preowned dealers did not exist. Online sales generally amounted to eBay and forum trades between small-time dealers and individual collectors.

Social media was in its infancy; Facebook was limited to (generally Ivy League) users with college email addresses. The velocity of niche-market and niche-hobby information was subject to structural limits.

Today, a quick search of Instagram reveals 63,543 returns for #pateknautilus and 32,795 for #patekphilippenautilus. More than 430 YouTube videos have cited the Nautilus in 2019 alone.

Millennial musician Ed Sheeran and “Shark Tank” star Kevin O’Leary have been photographed wearing Nautilus variants. “The Daily Show” host Trevor Noah has been photographed with a 5711 and the still-scarce white gold 5740/1G Nautilus perpetual calendar.

Patek Philippe Nautilus Perpetual Calendar Reference 5740

Musician Drake and actor Marc Wahlberg have worn Nautilus models in public appearances. All of the above have been posted, reposted, and discussed to death on social media.

And let there be no doubt; men unequivocally respond to fashion trends. The rise of influencers in parallel with social media is no coincidence. And whether current watch buyers acknowledge this phenomenon, the surge of Nautilus values parallels a surge in the watch’s popular-culture profile.

Amid the fore-arms race to buy, sell, wear, and be seen wearing a Patek Philippe Nautilus, Patek Philippe itself stands as a neutral party.

Given the opportunity to capitalize on sudden interest in an aging model that long ago recouped all development expenses, Patek Philippe mostly has held the line. Two retail price increases since early 2018 for the core 5711/1A have left the $30,620 watch reasonably priced relative to what a new owner can obtain from a secondary buyer just minutes after taking delivery.

View through the display back of the Patek Philippe Reference 5711 stainless steel Nautilus (photo courtesy GaryG)

Patek Philippe sternly enforces MSRP guidelines at dealers, so markups on that front are nearly unheard of. To the extent that consumer resale can be prevented, Patek Philippe attempts to stem the tide, but clients are subject to far fewer formal constraints than dealers.

The annual production of Patek Philippe, which is believed to number between 45,000 and 65,000 watches, overwhelmingly favors precious metal units over the steel models that represent the most sought-after Nautilus variants.

Steel watches are said to comprise roughly 20 percent of the total output, and the lion’s share of steel volume is dedicated to the Twenty-4 collection for women.

Still other steel allocations concern the new 5212A Calatrava Weekly Calendar, the Aquanaut sports collection, and occasional special editions.

As with pricing, Patek Philippe appears to be making only incremental changes to its volume allocation. With neither a major price hike nor a surge of volume, Patek Philippe appears unwilling to surrender brand equity by exploiting the present mania for a lucrative model.

The same mindset should inform watch collectors’ strategy for investing in the Nautilus model family.

Investing in the Nautilus: taking a long view

The Patek Philippe Nautilus may be the most versatile and desirable upper-echelon sports watch family available today. Lost in the maelstrom encircling these watches is the sheer range of competence that has propelled the Nautilus to a 43-year production run. From the perspective of “beach to tux” flexibility, a steel 5711, 5712, 5726, or 5990 is hard to beat.

Patek Philippe Reference 5726/1A Nautilus annual calendar with moon phase indicator

All of the previous models – with possible exception of the 5712 – are sufficiently water resistant to wear at the beach, pool, and during sporting activities. Short of concussive sports (e.g., tennis or golf), a Nautilus can be a perpetual presence in a man or woman’s daily dress.

Every watch in the Nautilus range is sufficiently luminescent to read at night, and all models offer the convenience of automatic winding.

Given the practical limits of straps, which age out of service and often cannot tolerate water, the availability of a full bracelet on every Nautilus model offices a big advantage for daily use. And while many sports references from other brands are oppressively large, Patek Philippe has maintained the core Nautilus collection at roughly 40 mm in diameter.

Today’s luxury watch buyer is more open than previous generations to wearing a sports watch in formal attire. From that perspective, the cuff-friendly Nautilus is the ultimate full-time companion.

While many Nautilus owners are prolific collectors, the simplicity and security of traveling, working and vacationing with a single polyvalent watch appeals even to advanced connoisseurs. This phenomenon has parallels in concurrent elevation of interest in many full-bracelet steel Rolex models and most variants of the Audemars Piguet Royal Oak, the Nautilus’ original sibling and rival from the 1970s.

Given this broad-based appeal and high inherent value of the Nautilus collection, this is a space to watch. Current pricing likely represents an unsustainable surge over durable value, and that puts a premium on patience for the savvy investor-collector.

At the same time, collector and vendor perceptions of the Nautilus likely have undergone a paradigm shift since 2016.

Patek Philippe Reference 5711 stainless steel Nautilus with white dial (photo courtesy GaryG)

Patek Philippe’s disciplined approach to retail pricing and volume means that a 5711 or its complicated variants should retain a premium over retail value in perpetuity. Prices will come down, and that’s a good thing for the watch community.

Given the broad-based appeal of the model and shifting collector preferences, the best time to buy a Nautilus may lie just past our manic moment.

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Quick Facts Patek Philippe Nautilus Reference 5711
Case: 40 x 8.3 mm, stainless steel
Movement: automatic Caliber 26-330 S C, 28,800 vph/4 Hz frequency; 35-45-hour power reserve, Gyromax balance, Spiromax balance spring, Patek Philippe Seal
Functions: hours, minutes, seconds; date
Current retail price: $30,620

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From Zeros To Heroes: The Patek Philippe Nautilus 5711/1P And 5976/1G Anniversary Watches

4 Record-Setting Stainless Steel Patek Philippe Models Auctioned At Phillips. Is A Fifth Coming?

Patek Philippe Nautilus Perpetual Calendar Reference 5740: Sophisticated, Sporty With A Story To Tell

12 replies
  1. Gil
    Gil says:

    “…Patek Philippe appears unwilling to surrender brand equity by exploiting the present mania for a lucrative model.”

    I think they just might be exploiting it, Tim – and it only benefits the brand equity. But, we need to know the exact production numbers for Steel Nautilus models before sternly pointing any fingers.

    • Tim Mosso
      Tim Mosso says:

      It’s true; seeing through Patek’s production plans and Nautilus volumes is important in order to determine how the company is or isn’t leveraging the current craze (and it is a craze). Likely, this is something we’ll know only in hindsight.

  2. ChrisB
    ChrisB says:

    I had the opportunity to see one of these recently and I thought it was much too large in the metal. Way bigger than I imagined and a bit too “Look at my Nautilus!” in size. Also, the way people comment on the blue hue left me disappointed. I held the watch inside and next to the window to let it catch the light and felt disappointed when I didn’t suffer a beauty-induced Florence-syndrome style seizure from the supposedly magnificent fial. This watch is lovely but 75% of the price is the hype and the other 25% is intrinsic value. I would much rather spend my dollars on more innovative haute horology pieces.

  3. Dominic
    Dominic says:

    Timely article as I just purchased a 5711a yesterday for $61000. Am I concerned that the bubble will pop? Yes! That said, I’ve been looking to acquire a piece for a long time and sitting on the sidelines has only pushed pricing higher. In some ways the bubble has already popped as pricing has come back from $75000. While it can drop further I can say for sure that getting one at list is impossible for anyone except for the most privileged. There is no wait list …. dealers will sell to who they think will generate the best value for themselves over the long run. The local AD in a very affluent area is receiving just 1 per year and I personally know many people who would love to own one. Demand from a globe rising wealth strips the small production numbers by orders of magnitude.

    • Tim
      Tim says:

      Hi Dominic,
      I agree with you about the recent dip in prices, and I suspect that $75,000 was the top of the cycle. In the end, this hobby is about having fun, and I’m glad that you decided to start enjoying the Nautilus immediately. In 10 months, maybe it will be worth less, but. I’m sure that won’t matter if you intend to keep it for years. In the end, I suspect that these always will be worth more than retail, and you will have all the good memories of the times you spent with the watch.

  4. Russell
    Russell says:

    As always Tim, a well considered and accurate reflection of the watch market and the unsustainable rise in prices for the 5711 and Nautilus in general.

  5. bob
    bob says:

    Anyone that thinks dealers are not selling at markups are kidding themselves. Part of the problem is many dealers sell out the back door to grey market dealers with fake names on the papers getting mark ups no from end users but from he grey market dealers. In the end his who thing will end up more as a negative for the brand than a positive as eventually younger people will stop even bothers to go to Patek stores as nothing they ever want is in stock, and therefore they will loose the ability to see , learn about, desire and purchase future models from the brand. If you think longer term this entire thing spells trouble for Patek in the very long run IMHO.


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