Watches that defy the ravages of time In a hotel suite high above the city of Basel last week, I held a watch made of white gold and set with 200 diamonds, that is on sale for $2.5m. As I no longer own a watch, and never spent more than the equivalent of $20 on one when I did, I found it a little unsettling. Still, the experience, during a discussion with Michel Pitteloud, chief executive of Graff's watch division, prepared me for the Basel watch fair next door, where I heard about another company's timepiece that had gone for $5m. By the end of a day, when I saw a watch selling for $1,400, it seemed cheap. While the world spent much of 2011 in fear of further financial catastrophe, luxury watch sales soared. Swiss watch exports rose 19 per cent to a record SFr19.3bn. Watch brand owners such as LVMH and Richemont have announced big increases in sales. Yet the odd thing about expensive watches is that they are not nearly as good at keeping time as those you can buy for the cost of a takeaway meal. Luxury watchmakers have been rocked by not just one but two technological revolutions that would, in any other industry, have put them out of business. The first is documented in a beautiful book, The Mastery of Time, published for the Fondation de la Haute Horlogerie, the Geneva-based trade body: "On December 25, 1969, the Seiko Quartz Astron 35SQ was presented in Tokyo. It was accurate to within one minute a year. The book continues: "The impact of quartz on the watchmaking industry was devastating. A large number of manufacturers simply disappeared . . . Older watchmakers were forced to retire and the younger ones tried to change occupation. Watchmaking schools closed and gloom hung over an entire stricken profession. The second revolution is there as I type. The time, accurate to the second, is at the bottom of my screen. With a click of the mouse I can find the time in San Diego or Melbourne, too, or on what day of the week New Year 2022 will fall (Saturday). Luxury watchmakers, whose watches still rely on mechanical workings, do not hide what this has meant. Alexander Schmiedt, a director at Montblanc International, recently said of his company's watches: "Your phone for $50 is much more precise." Yet luxury watches have found a future. It is as if companies were selling platinum typewriters or ruby-encrusted slide rules. That the luxury watch business survives and thrives shows it has understood some of society's deepest desires. There are lessons for other threatened industries. The first is that in an age of mass production, some will pay for craft. In Switzerland's workshops you can watch people with an eyeglass and a pair of tweezers fitting impossibly tiny cogs and wheels. The manufacturers make a virtue of this, with the most expensive watches exposing their mechanical innards. At the same time, manufacturers continue to innovate with new materials and mechanical ingenuity. There cannot be another industry that boasts of how many "complications" its products have. They talk, too, about "power reserves" - how long a watch works between windings. I felt like saying to those showing off their two-day power reserves that the last Casio I owned had a two-year power reserve. But these watches are not aimed at me; they are for people who care about brands, who feel that owning one tells the world something important about themselves. The watches are also jewellery, explicitly so in the case of women's watches that are combined with bracelets and brooches. At Harry Winston, the US company, I saw watches whose faces were lined with peacock feathers. Which industries could imitate luxury watches" time-defying trick? The art business already has. Photography should have smashed it and Photoshop finished it off. Instead, we have had everyone from Jackson Pollock to Damien Hirst. And those who came before still retain a compelling power: is there a photograph to match the depth of Rembrandt's self-portrait in London's Kenwood House? Another industry that could emulate the watchmakers is the books business. If, some day soon, every author writes only ebooks and you can walk along a beach without seeing a single paperback, I suspect there will still be a market for lovingly produced, hand-sewn hard covers. I may not be a luxury watch buyer, but I would happily fork out for one of those.