In-House Versus Outsourced Movements

The relative pros and cons of in-house movements (those developed and built by the same brand that makes the rest of the watch) versus those bought in from a third party (commonly known as outsourced) is one of the longest and most perennial bones of contention in horology.

Talk to any purist and they will generally come down on the side of the home grown engine but, as with just about any argument, a sweeping statement saying one is inherently better than the other rarely adds up. There are, in fact, a number of considerations that have to be taken into account.

Below, we take a look at some of the important benefits and drawbacks to keep in mind before deciding to go with one or the other.

What Constitutes an In-House Movement?

Possibly the biggest problem with a blind statement on why an in-house movement is somehow superior to an outsourced one is the fact that no one seems to be able to agree on exactly when a mechanism can call itself ‘in-house’.

Any caliber consists of a vast number of different parts. That figure can range from around 100 for the most basic three-hander to well over a thousand for some of the ultra complicated examples at the top end of haute horology. It is extraordinarily rare for any one watchmaker to produce every single one of those parts themselves, especially those building watches at any kind of scale.

Certain and often critical components, usually the ones with the finest tolerances such as the hairsprings, are frequently supplied fully formed to the manufacturer from an outside concern.

Even Rolex, who are extremely vocal about their self-sufficiency, are known to have at least some of their mechanisms’ workings bought in.

So, at what point does the percentage of domestically manufactured constituents get high enough for the movement to be officially in-house?

Like I said, there is nothing official written down and so it is left in the hands of the brand itself to a large degree.

Another issue comes down to semantics. Where third party mechanical calibers are concerned, ETA SA Manufacture Horlogère Suisse (a Swiss company which has been making movements since 1856) holds a virtual monopoly, supplying the vast majority of brands with a wide range of outsourced mechanisms.

However, ETA is now owned by the Swatch Group, an enormous conglomerate which also holds the likes of Omega, Breguet, Blancpain and Glashütte among others. It is, then, a matter of interpretation whether or not you consider the movements inside those brands’ watches to now be officially called ‘in-house’ seeing as they are made by a company under the same umbrella.

So, if the whole thing is a bit up in the air, does the ‘in-house’ label actually matter?

The Benefits of an In-House Movement

Obviously the only metric that matters when comparing one movement to another is performance. Can one caliber keep better time, offer more shock protection, last longer, etc. than some other one?

And again, an all-encompassing assertion that an in-house mechanism will always do better than the outsourced equivalent is simply untrue.

ETA have been in business longer than just about every watchmaker still operating today. That is more than 150 years of constant improvement, development and refining, until they have reached their current lauded status.

Any company concentrating on perfecting their single-minded output for that length of time is one that makes a world-class product.

ETA offers a number of different movements across a range of grades. Those at the highest, Chronometer Grade, meet the stringent requirements of the COSC; -4/+6 seconds a day.

What’s more, you will find ETA calibers used widely in many outstanding watches from a host of premium brands. The ETA 7750, for instance, has formed the base architecture for some of the most renowned chronographs ever made, from the likes of IWC, Panerai, Chopard, Hublot and even Patek Philippe.

Simply put, there are no guarantees that an in-house built movement will outperform a third party one just by virtue of it having been made in the same facility as all the other components.

To really make a true comparison, you have to take one specific homegrown caliber and judge it against its direct outsourced counterpart.

So then, why all the fuss about in-house? In many ways, it comes down to a matter of image.

For any watch manufacturer, dedicating the resources to theorize, design, engineer, assemble and test a movement, even the most rudimentary example, is a colossal undertaking. The skill, man-hours and expenditure which must be devoted to it are immense; so big in fact that only a slack handful have the abilities and assets required. Those restrictions give an in-house caliber perhaps the most vital of all factors when it comes to any luxury product; exclusivity.

Ever since the quartz crisis of the 1970s and 80s, mechanical watches have been marketed and sold not as essential tools to fulfill a purpose, but on their passion, heritage and tradition. Buying a high end timepiece now is done purely on emotion rather than through necessity. Brands that advertise their new release as having an in-house movement tap right into that sensation, appealing directly to those who prize individuality and appreciate the legacy behind their purchase. And are willing to pay for it.

The Future for In-House Movements

The next few years are going to see a major upheaval when it comes to the supply of third party watch movements.

Not long after the Swatch Group acquired ETA, they announced plans to completely stop selling their calibers to any company not owned by the conglomerate themselves. As you would imagine, the declaration caused something of a commotion, to the extent that legal action forced Swatch to gradually taper off the allocation over a number of years rather than just stopping it all at once.

Nevertheless, that only bought those relying on ETA some time, time which runs out at the end of 2019. All obligations are then counted as spent and there will be no more ETA calibers for anyone non-Swatch related.

Although other third party manufacturers have stepped in to try and address the shortfall which is bound to occur, the upshot of it is we are going to see a lot more in-house movements in the future.

With only those brands holding enormous reserves at their disposal able to manufacture their own calibers, it is likely there will be more collaborations between houses, the start of which we are already seeing.

Most recently, Tudor and Breitling worked out a mutually beneficial partnership, with the Rolex sister company being given Breitling’s B01 for their Heritage Chronograph series (becoming the MT5813) in exchange for Tudor’s MT5612 going the other way, to power Breitling’s Superocean Heritage II dive models.

The arguments for and against in-house versus outsourced movements will continue for the foreseeable future. What will change though is the number of brands creating their own calibers and, with the watch buying public becoming more and more knowledgeable, those manufacturers are likely to do well.

There’s no doubt that saying the movement was built by the same craftsmen and women responsible for every other facet of the watch holds a certain amount of cachet, whether or not it performs as reliably as one supplied from outside.

How it will affect the industry as a whole remains to be seen.