In some iteration or another, we’ve all heard our grandparents exclaim, “When I was a kid, you could eat a slice of pie and ride the trolley for a nickel!” What five cents could buy you then versus today is meant to shock and awe listeners.

In the same vein, if we look at a Rolex Submariner: in 1957, the watch retailed for $150 USD (or approximately $1,280 in today’s dollars). Fast-forward to 2017, the Rolex Submariner now costs $7,500 USD.

To chalk this up to basic inflation and changes in cost of living is an over-simplification of matter. This significant price jump is more attributable to Rolex’s transformation and expansion from a well-respected watchmaker to a hotly-coveted luxury powerhouse. We explore the rise of Rolex, its history, and its evolving brand identity.

Watch-Making Innovators
Founded in 1905, Rolex is historically marked for its innovation and developing mechanically superior watches. Its most notable technical breakthroughs include the first waterproof wristwatch, first wristwatch with an automatically changing date on the dial, and first watch to display two time zones at once. Rolex was also the first watchmaker to meet the Contrôle Officiel Suisse des Chronomètres organization’s rigorous standards and earn the chronometer certificate for a wristwatch.

Rolex was largely recognized for its revolutionary work in the watchmaking industry but it really gained momentum as a luxury brand (ironically enough) when the greater industry was floundering.

A Turning Point: The Quartz Crisis
In the 1970s, the Swiss watchmaking industry faced a serious threat: quartz watches. Unlike the mechanical watches whose complicated movements had been painstakingly perfected by generations of watchmakers, quartz watches used a synthetic crystal to keep near-perfect time. Quartz watches were significantly cheaper to produce and their superior accuracy effectively negated the need for mechanical movements. In turn, watches became a commercially available commodity. With the introduction of this unexpected rival, Swiss brands saw their prestige and brand value plummet. Some houses folded while others—including Rolex—scrambled to transition to a new market.

Rolex found its niche as a luxury label and the brand doubled-down its efforts to upgrade its materials and refine their movements. And like other mechanical watchmakers, Rolex distinguished itself from the readily-available quartz watches. Instead the brand touted its complex movements and time-honored craftsmanship as worthiness of its high price tag and newfound luxury brand status. Rolex capitalized on the democratization of watches by showcasing how completely exceptional the brand was.

Rolex’s Identity Today
Without compromising its design prowess, Rolex has matured into a true luxury brand. Rolex plays homage to its history but has upped the quality of its materials, wearability of its watches, and fine-tuned its already refined movements.

And strong example of this evolution is the aforementioned Rolex Submariner. The 1957 Rolex Submariner was designed primarily as a diving tool, made with aluminum bezels and stamped components. It was elegant, yes, but above all, it was highly functional as a diving watch. Today the Submariner watch boasts higher grade materials including ceramic bezels, finer steel, and more accurate movements. Rolex has effectively built upon its practical design to create a luxury timepiece, investing in its construction, and with every new design innovation, the Rolex Submariner’s retail cost ticks up.

Today Rolex reigns as one of the most immediately recognized status symbols. The brand has come to fully represent an aspirational and affluent lifestyle, while continuing to release exceptionally well-crafted timepieces. And with this covetable status at both the technical and branding level, it’s no wonder Rolex watches are so worthy of their high price tag.