How does a watch's movement affect its retail price?

The statement regarding higher-quality movements leading to higher prices due to craftsmanship and complexity accurately reflects a key principle in the luxury watch market. Watch movements, whether mechanical or quartz, are fundamental to a watch's overall performance and desirability.

Higher-quality movements often involve intricate engineering, superior materials, and extensive handwork, which contribute to both their reliability and aesthetic appeal. Precision movements, such as those found in high-end mechanical watches, typically require skilled artisans to assemble and can include complex features like tourbillons, perpetual calendars, and other complications that enhance functionality. This complexity not only elevates the craftsmanship but also increases production costs, which manufacturers often reflect in the retail price.

In contrast, the other options do not capture the complete relationship between movement quality and pricing. For instance, not all digital movements are inherently cheaper since certain innovative digital technology can also command high prices. Likewise, it is a misconception that all mechanical watches are priced the same; prices vary significantly based on brand, movement quality, and additional features. Finally, while brand names do influence prices, they are not the sole determining factor; rather, the quality of movement plays a critical role in establishing value within the market.